Fiqh al-muamalat
The branch of Islamic jurisprudence that governs commercial and financial dealings between people.
Fiqh al-muamalat is the branch of Islamic jurisprudence dealing with transactions: sales, leases, partnerships, agency, loans, guarantees and similar dealings. It supplies the contract types and conditions that Islamic finance builds on. Contemporary standard setters such as AAOIFI draw on it when they issue Shariah standards for modern products.
This entry explains a term; it is not a Shariah ruling. Approving a product is for each institution's own Shariah board and regulator.
Related terms
ShariahIslamic law and its principles; in finance, the rules that contracts, products and institutions are expected to comply with.MurabahaA sale at cost plus an agreed, disclosed profit; the seller must own the asset first. Payment is often deferred in instalments.IjarahA lease: the lessor owns the asset and sells its use for an agreed rent over an agreed period.MudarabahA partnership of capital and work: profit is shared by an agreed ratio, while financial loss falls on the capital provider.