Islamic Finance: A Corollary to Legal Pluralism or Legal Diversity in South Africa and the Netherlands?

Comparative and International Law of Southern Africa, Forthcoming

28 Pages Posted: 16 Feb 2016

See all articles by Omar Salah

Omar Salah

Tilburg University; De Brauw Blackstone Westbroek

Christa Rautenbach

North-West University (Potchefstroom Campus)

Date Written: December 14, 2015

Abstract

In this contribution we discuss the position of Islamic finance in South Africa and the Netherlands in the light of legal pluralism and legal diversity in each legal system. Islamic finance is based on Islamic law, which is a set of moral and religious principles. According to Islamic law, the payment and receipt of riba (interest) and gharar (contractual uncertainty) are forbidden. Consequently, alternative Islamic finance contracts are structured where the financier makes a profit either through trade in tangible assets or through a profit-and-loss-sharing arrangement, instead of making profit through charging interest.

Keywords: Islamic finance, riba, gharar, legal pluralism, legal diversity

JEL Classification: K19, K34, E50

Suggested Citation

Salah, Omar and Rautenbach, Christa, Islamic Finance: A Corollary to Legal Pluralism or Legal Diversity in South Africa and the Netherlands? (December 14, 2015). Comparative and International Law of Southern Africa, Forthcoming, Available at SSRN: https://ssrn.com/abstract=2732256

Omar Salah

Tilburg University ( email )

P.O. Box 90153
Tilburg, DC Noord-Brabant 5000 LE
Netherlands

De Brauw Blackstone Westbroek ( email )

Tripolis
Burgerweeshuispad 301
1076 HR Amsterdam
Netherlands

Christa Rautenbach (Contact Author)

North-West University (Potchefstroom Campus) ( email )

Private Bag X6001
Potchefstroom, North West 2520
South Africa
00 27 182991939 (Phone)
00 27 182991955 (Fax)

HOME PAGE: http://www.nwu.ac.za/node/14166

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