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Islamic Finance: Debt versus Equity Financing in the Light of Maqasid al-Shari'ah

Author

Listed:
  • Eddy Yusof, Ezry Fahmy
  • Kashoogie, Jhordy
  • Anwar Kamal, Asim

Abstract

A hot topic among Islamic economists is the debt versus equity debate. Which of the two are more in line with justice and equality? Which of them is more productive in fulfilling the greater objectives of the Shariah? This paper is divided into sections. After the introduction, it is followed by problem statement as well as objective of the study. After that, section 4 briefs the research questions for answering the analysis in this paper. Section 5 deals with discussion obtained from literature review whichhighlights important issues regarding Maqasid Al-Shari’ah in term of justice and equality vis-àvis the current practice as well as ideal model of Islamic banking and finance. Finally, this paper ends up with conclusion.

Suggested Citation

  • Eddy Yusof, Ezry Fahmy & Kashoogie, Jhordy & Anwar Kamal, Asim, 2009. "Islamic Finance: Debt versus Equity Financing in the Light of Maqasid al-Shari'ah," MPRA Paper 20722, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:20722
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    References listed on IDEAS

    as
    1. Chapra, Mohammad Umar, 2008. "The Islamic Vision of Development in the Light of the Maqasid Al-Shari'ah (Research Paper)," Occasional Papers 235, The Islamic Research and Teaching Institute (IRTI).
    2. Mehmet Asutay, 2007. "Conceptualisation Of The Second Best Solution In Overcoming The Social Failure Of Islamic Banking And Finance: Examining The Overpowering Of Homoislamicus By Homoeconomicus," IIUM Journal of Economics and Management, IIUM Journal of Economis and Management, vol. 15(2), pages 167-176, December.
    3. Munawar Iqbal & Philip Molyneux, 2005. "Thirty Years of Islamic Banking," Palgrave Macmillan Studies in Banking and Financial Institutions, Palgrave Macmillan, number 978-0-230-50322-9, September.
    Full references (including those not matched with items on IDEAS)

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    Cited by:

    1. Ngalim, Siti Manisah & Ismail, Abdul Ghafar, 2015. "An Islamic Vision Development Based Indicators in Analysing the Islamic Banks Performance: Evidence from Malaysia, Indonesia and selected GCC Countries," Working Papers 1436-2, The Islamic Research and Teaching Institute (IRTI).
    2. Rashid, Mamunur & Nur Khoirunnisaa Pg Hj Johari, Dk Siti & Izadi, Selma, 2023. "National culture and capital structure of the Shariah compliant firms: Evidence from Malaysia, Saudi Arabia and Pakistan," International Review of Economics & Finance, Elsevier, vol. 86(C), pages 949-964.
    3. Elsayed Elsiefy, 2014. "Fundamental Requirements for Building an Islamic Venture Capital Model," Accounting and Finance Research, Sciedu Press, vol. 3(1), pages 1-55, February.

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    More about this item

    Keywords

    productivity; justice; Equality; Islamic finance; debt financing; equity financing; maqasid shariah;
    All these keywords.

    JEL classification:

    • D20 - Microeconomics - - Production and Organizations - - - General
    • D40 - Microeconomics - - Market Structure, Pricing, and Design - - - General

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