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35 Arab L.Q. 1 (2020)

handle is hein.journals/arablq35 and id is 1 raw text is: 


                    ARAB  LAW QUARTERLY  35 (2021) 1-5          Arab Law
 BRILL                                                          Quarterly
N IJ H O F F                                                    brill.com/alq



Introduction: Islamic Finance and Contemporary

Challenges



i       Introduction

Islamic finance is a concept that, irrespective of one's religious convictions,
has gained momentum   and  been accepted around the world today. Its devel-
opment  and resilience, in light of the recent financial crises and on-going un-
precedented pandemic,  has not only confirmed its practical benefits but also
untapped  its potential. However, it is also clear that the numerous challenges
which it still faces are reasons why Islamic finance has yet to enjoy the benefit
of its full potential. Understanding the nature of such challenges must be the
first step towards their resolve, as it would be impossible to prescribe an ap-
propriate medication without first diagnosing the disease. In this regard, we
are strongly confident that the ongoing development of Islamic finance can be
facilitated via further academic research and the publication of such findings.1
   Understanding its historical context is important to resolve Islamic finance
challenges. The classical notion that Islamic finance is limited to Islamic com-
mercial finance only needs to be both  broadened  and institutionalised by
accepting that Islamic finance indeed has two branches: namely, Islamic com-
mercial finance as well as Islamic social finance. In this way, it will be pos-
sible to achieve financial inclusion without marginalising any segment of the
population on the grounds that they are 'unbankable'. The word 'unbankable'
would  have no significance if both Islamic commercial finance and Islamic
social finance could be housed under one roof. The ways in which to achieve
this goal need to be researched and implemented. Moreover, in this modern
era, Islamic finance cannot operate without technology. Investment in tech-
nology is not only important in itself, but we also need to understand the ways
in which technology and Islamic finance can be integrated to use the available
resources in the best possible manner. Furthermore, there is also a need to
redefine Islamic finance in light of magsid al-sharfah, or the objectives of

i  M. Kabir Hassan & Aishath Muneeza, Need to Redefine Islamic Finance in the Light of
   Maqasid al-Sharah, Working Paper, July 2020, University of New Orleans; Umar Oseni,
   M. Kabir Hassan & Nazim Ali, 'judicial support for the Islamic financial services industry:
   Towards reform-oriented interpretive approaches', Arab Law Quarterly, forthcoming 2021.


© KONINKLIJKE BRILL NV, LEIDEN, 2020 1 DOI:10.1163/15730255-BJA10067

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