Abstract
Muslim majority countries, in particular, face a higher incidence of poverty than the rest of the countries in the world. Low per capita incomes result in lower savings and investments. As a result, capital formation in physical infrastructure and human capital development is significantly hampered and compromised. Without industrialization, most countries fail to generate enough income and exports. Governments remain poorly funded through economic activities and largely depend on assistance and grants. Weak tax base results in more resources going to non-development expenditure as compared to development expenditure. Thus, this vicious cycle continues. This chapter discusses the solutions offered by Islamic finance through its underpinning value system and worldview and through its set of commercial and social finance institutions to intervene in development assistance through and beyond markets.
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Notes
- 1.
Al-Muslim, Book of Zakat, Vol. 3, Hadith No. 2380.
- 2.
Sunan Abu Daud, Book of Wills, Vol. 3, Hadith No. 2865. Also, Sunan An Nisai, Book of Zakat, Vol. 3, Hadith No. 2543.
- 3.
Al-Bukhari, Book of Commentary, Vol. 6, Hadith No. 4684. Also, in Al-Muslim, Book of Zakat, Vol. 3, Hadith No. 2308. Also in Sunan Ibn Majah, Chapters on Expiation, Vol. 3, Hadith No. 2123.
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Shaikh, S.A. (2023). Mobilizing Funds for Industrialization and Development Through Islamic Value System, Capital Markets, and Social Finance. In: Jumat, Z.H., Hafiz Khateeb, S., Nazim Ali, S. (eds) Islamic Finance, FinTech, and the Road to Sustainability. Palgrave CIBFR Studies in Islamic Finance. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-031-13302-2_8
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