Islamic Finance: Abrahamic Faiths and History, Potential, and Challenges

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Author(s): Shaista M. Mukadam (Birmingham City University, UK)
Copyright: 2026
Pages: 36
Source title: Social Impact, Ethics, and Practice in Abrahamic Finance
Source Author(s)/Editor(s): Camille Silla Paldi (Colgate University, USA), Phillip Lieberman (United States Naval Academy, USA & Vanderbilt University, USA), Mohammad Kabir Hassan (University of New Orleans, USA)and Isaac Lifshitz (Shalem College, Israel)
DOI: 10.4018/979-8-3373-6706-4.ch002

Keywords: Accounting and Finance / Business Science Reference / Religious Studies / Social Sciences & Humanities

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Abstract

This chapter explores the intricate connections between Islamic finance and the financial principles of other Abrahamic faiths—Judaism and Christianity. It delves into the shared ethical foundations that underpin these traditions, emphasizing fairness, social responsibility, and ethical conduct in financial transactions. Key similarities are examined, like the prohibition of exploitative interest, the emphasis on charity and social justice, and the promotion of ethical investments. This chapter provides a comprehensive overview of the history of Islamic finance, tracing its evolution from the time of Prophet Muhammad almost 1450 years ago to the present day. It begins with the foundational principles established in the Quran, which prohibit interest (riba) and promote ethical financial practices such as profit-sharing and risk-sharing. The chapter explores the development of financial instruments during the Golden Age of Islamic Civilization, including the use of sakk (precursors to checks) and suftajeh (letters of credit).

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