IslamicFinance.de

It’s simple. No interest on investments but the lender and borrower share the returns.
This form of financing, known as Islamic finance, confronts the lifelong convention in finance of receiving interest on a loan.
The global financial system depends on the founding concept that money itself is a commodity that needs not be invested into an underlying commodity to have value. That said, money can be leveraged to create greater returns through the application of derivatives. Critics artfully label these leveraged and speculative winning, or more euphemistically, returns making money out of nothing. This can ultimately have catastrophic results.
Islamic finance theoretically eliminates the speculative nature of conventional finance. In prohibiting the “unjustified enrichment” and “speculation or excessive risk,” Islamic scholars pushed three principles:
Prohibition of interest.
Profit and loss sharing (riba).
No speculation (gharar).
These, for practical purposes, distinguished Islamic finance form all other counterparts. Prohibition of interest or riba generally translates that lending money should not generate “unjustified income.” Profit and loss sharing accordingly emphasizes a partnership where partners shares profits and losses on the basis of their invested capital. Gharar simply means no speculation.