Abstract – AOCRJ-V2I3P4

The Islamic Manner of Financing Between Avoiding Risk and Pursuing
Opportunities: Toward Constructing a Balanced Culture of Risk

Dr. Kassim Moahammed,
Taibah University, Al-Medina, Saudi Arabia

Abstract:
Risk is, usually, viewed as the consequence of uncertainty on objective, and the relationship between risk and uncertainty is knotted. Due to this relationship, r i s k i s v i ewed as a cultural-constructed issue. In the Islamic law, uncertainty is present in all aspects of life, including financing, but it is systematized in such way that distinguishes risk taking from gambling. Al Sharia has placed rules and legislations that organized the manners of dealing with risk; whether in terms of avoiding, taking, or sharing it. The main notion of these rules is to build a balanced culture of risk that leads to avoid underestimating or overestimating of risk, while confirming the sharing principle in losses and profits. This paper examines the constructive role of the Islamic principles in developing an innovative and adequate culture of risk that balancing between benefiting from opportunities of risk taking without ignoring its potential negative consequences. The paper discusses the positive outcomes of such culture in establishing a coherent financing system. The conclusion shows that establishing a balanced culture of risk is essential for an effective risk management process in the financing sector. Culture of risk according to the Islamic financing manner is a balanced culture that leads to rational decisions in dealing with risk.

Key Words: Islamic Financing Manner, Culture of Risk, Overestimation and Underestimation of Risk.

Full Text (PDF)

open access logo

Courtesy Peter Suber

Volume 5

         Issue III
         Issue II
         Issue I

Volume 4

         Issue IV
         Issue III
         Issue II
         Issue I

Volume 3

         Issue IV
         Issue III
         Issue II
         Issue I

Volume 2

         Issue IV
         Issue III
         Issue II
         Issue I

Volume 1

           Issue I

Strategic Partners

Universities and Libraries

                           

Conference Partners

           

Feel free to contact : contact@aocrj.org

Publisher: Research Centre of Resource Mentors (RCRM), Pakistan.

Address: 604 Q Block Model Town, Lahore, Pakistan
ISSN; 2305-865X