The gradual democratisation of capital markets has seen more and more people investing in stocks , shares , and recently cryptocurrencies . Indeed , according to The FINRA Investor Education Foundation , there was an influx of armchair investors during the COVID-19 pandemic – and they tended to have a more diverse makeup than previous generations of investors .
But there is still one particular demographic that risks being left behind when it comes to access to investing . Because of their religion , there are strict rules facing Muslim consumers when it comes to how they invest . It has , in recent years , prompted a flurry of technological innovations specifically designed to meet the need for Shariah-compliant investing .
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What is Shariah-compliant investing ? As Ibrahim Khan , Co-founder of IslamicFinanceGuru ( IFG ), explains to FinTech Magazine , there are generally three separate requirements that operators must be aware of in order to attract Islamic consumers .
“ Muslims must not invest in haram ( impermissible ) practises contrary to the tenets of Islam ,” Khan tells us . “ Obvious prohibition points to the exclusion of investments that derive profits from impermissible verticals like alcohol , weapons , non-halal foods , and more .
“ Certain types of income like interest are also not allowed in Islamic law . For instance , a buy-to-let mortgage or highly over-leveraged stock or bond would not be Shariah-compliant , because making money from interest is impermissible .
“ Lastly , a good example of ancillary prohibitions would be ‘ gharar ’, an Islamic concept that means ‘ uncertainty ’ or ‘ risk ’
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