Business Valuation 102 – methods of valuing a firm, 102.1 Asset Valuation method.

INTRODUCTION TO VALUATION In an efficient capital market, the best estimate the value of the firm is given by the current share price multiplied by the number of shares in issue.  There is only one element of value which is missing from this calculation and that is the difference between the firm as it is … Continue reading Business Valuation 102 – methods of valuing a firm, 102.1 Asset Valuation method.


Difference between Simple interest and Compound Interest

Simple interest is based on the principal amount of a loan or deposit, which remains constant while calculating it against the interest rate, which is a percentage of the principal amount of the loan. Compound interest is based on the principal amount plus the interest that accumulates on it in every period, i.e. at the end of each period, … Continue reading Difference between Simple interest and Compound Interest

Equity-based Financing vs Debt-based Financing

Islamic Bankers Resource Centre

Recently I have been asked again on why Islamic Banks still uses a lot of Debt-based Financing products, instead of moving to Equity-based Financing products, which on perception was supposed to be more “Islamic”.

Yes, ideally an equity-based financing do equate to a more “Islamic” structure, if your definition of being more “Islamic” is risk-sharing. Not all structures must be risk-sharing; transfer of risks are definitely acceptable in Islamic Banking circle. The idea is an age old idea; if you undertake a low-risk structure or there is no risks for the bank (where all risks are transferred to customers) then technically the bank should earn low returns for it. If the risks are higher i.e. Bank carries the risks, Banks would be entitled to higher returns. High risk equates to High returns.


If an Islamic Bank operates in the same…

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Islam and Personal Income Sharing Agreements: A Preemptive Strike Before The Coming Revolution

Practical Islamic Finance

An Income Sharing Agreement (or “ISA”) is a financial vehicle in which an individual or organization gives a fixed amount of money to a recipient who, in exchange, agrees to pay back a percentage of his/her income for a fixed number of years.(1)

For the past five years I have worked on familiarizing consumers in general and the Muslim community in particular with the usefulness of using Income-sharing agreements.

While advocating for Income-Sharing Agreements, like with all new products and ideas, I came across many nay-sayers that questioned the product’s wisdom and fairness.

I will attempt to answer all of the objections I’ve encountered so that the reader is armed with the knowledge they need in case someone tries to convince them that ISAs are unfair or unIslamic.

I received the comments below (In bold) in response to requests for opinion on an income-sharing agreement I set up with my…

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The Potential Opportunities with Fintech for Islamic Banking

Islamic Economics Project

Salman Ahmed Shaikh

Islamic finance can help in enabling access to financial services for people who want Islamic financial services. The key question is that can Islamic finance also provide access to financial services to the bottom of the pyramid population. Financial inclusion of the poor requires a different approach in product design, pricing and delivery. This requires innovation, flexibility, efficiency and committed leadership.

Islamic microfinance is yet to take big strides even though Islamic finance gives due emphasis to egalitarian financial structures and products in the Islamic economics and finance literature. Fintech offers an opportunity for Islamic financial institutions to efficiently reach the potential clients. Fintech can help in increasing Islamic finance outreach in regions where brick-and-mortar model of delivery will not be financially sustainable.

In the product structures, Fintech can assist in organizing completion of different steps involved in a typical Islamic finance transaction. A key issue is…

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Islamic Moral Economic Values : Foundations of Islamic Finance

Introduction The return of moral/ethics in the face of unsustainable production and consumption patterns in particular since late 1960s; see the references made to the ethical deficiency of capitalism in the face of financial crisis; Hence, recognition and acknowledgement of values as an important variable/factor explaining through different mechanism of economic and financial behaviour, but … Continue reading Islamic Moral Economic Values : Foundations of Islamic Finance