SOURCES OF ISLAMIC FINANCE AND THEIR ROLE IN DEVELOPMENT

Abstract

This article examines the sources of Islamic finance and their role in socio-economic development. The Islamic financial system is based on Sharia principles and is distinguished by the prohibition of interest (riba), an emphasis on justice, and a strong linkage with the real sector of the economy. This approach contributes to the creation of a stable, ethical, and sustainable financial environment.

The article provides an in-depth analysis of the main sources of Islamic finance, namely the Qur’an, Sunnah, Ijma, and Qiyas. Based on these sources, key Islamic financial instruments such as mudarabah, musharakah, murabahah, ijara, and sukuk have been developed. Their operational mechanisms and differences from conventional financial instruments are clearly explained.

Special attention is given to the role of Islamic finance in promoting economic development. Islamic financial institutions support small and medium-sized enterprises, reduce poverty, enhance financial inclusion, and channel investments into the real sector of the economy. The principle of fair sharing of profit and risk is highlighted as a core factor of their effectiveness.

In conclusion, the sources and principles of Islamic finance represent an alternative and promising model for sustainable development. The growing adoption of Islamic finance at both national and international levels demonstrates its significant potential in addressing contemporary socio-economic challenges.