From Profit to Purpose: Financial Sustainability in Islamic Finance
List of Authors
  • Kamaruzaman Noordin, Mohd Rizal Muwazir, Zalina Zakaria

Keyword
  • Financial sustainability, Islamic finance, Ethical Investment, Social finance

Abstract
  • Financial sustainability is a critical concept that extends beyond mere profitability and short-term viability, emphasizing long-term resilience, adaptability, and responsible resource allocation. This paper explores the principles of financial sustainability within the context of Islamic finance, which integrates ethical, social, and environmental considerations into its framework. Unlike conventional finance, Islamic finance is guided by Shariah principles, such as the prohibition of riba (interest), avoidance of gharar (excessive uncertainty), and the promotion of profit-and-loss sharing models like Mudarabah and Musharakah. These principles foster equitable wealth distribution, risk-sharing, and ethical investment practices, aligning financial activities with broader societal and environmental goals. The paper also examines the role of zakat (obligatory charity) and waqf (endowments) in promoting social equity and economic stability, highlighting their contribution to financial sustainability. Additionally, the paper discusses the challenges facing Islamic finance, including misinterpretation of Shariah principles and competition with conventional financial systems. By addressing these challenges through education, regulatory frameworks, and ethical governance, Islamic finance can enhance its role in achieving sustainable economic growth. Ultimately, this paper argues that Islamic finance offers a holistic approach to financial sustainability, balancing economic objectives with ethical and social responsibilities, and providing a model for resilient and inclusive financial systems in an increasingly complex global economy.

Reference
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