TheJakartaPost
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Islamic finance needs to move forward
In other words, there is a need for Islamic finance to expand the screening process to the positive screening criteria in order to cover form as well as substance of Islamic finance.
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Islamic finance, with its features derived from the Quran and Prophet’s sayings (hadith), is expected to be the locomotive of the movement toward ethical and social finance. (Antara/Dewi Fajriani)
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slamic finance, with its features derived from the Quran and Prophet’s sayings (hadith), is expected to be the locomotive of the movement toward ethical and social finance.
It is expected to reflect ethical and social finance in their practice since theoretically they share several similarities. One of them is that, as a part of an alternative finance with distinctive features, their focus primarily lies in how individuals manage their money in such a way that is in line with their morals and beliefs.
In other words, while mainstream finance has been driven solely by the motivation of maximizing risk-adjusted returns, Islamic and ethical and social finance have included an additional objective for financial market activity that is compatible with the investor’s ethics and promotion of social welfare activities .
Although both types of alternative finance aim to obtain high return on their financial performance, they take into account not only the pure economic return but also the social returns that society benefits from their money being used in compliance with their beliefs.
