15/06/2026
Islamic Finance Is Not a Replica of Conventional Finance.
By: Jumah Habeeblai Abiodun, PhD, CSAA, MNIF, FIFP
Summarized by:
Yahaya Suleiman Salihu PhD
A common misconception about Islamic finance is that it merely replicates conventional finance under different names. This claim, promoted by some critics within and outside Muslim communities, overlooks the fundamental differences between the two systems.
Islamic finance is built upon distinct philosophical, legal, and ethical foundations. Its prohibition of Riba (interest), Gharar (excessive uncertainty), Maysir (gambling), and other unjust transactions fundamentally differentiates it from conventional finance. While some products may appear similar because both systems operate within the same economic environment and address similar commercial needs, similarity in function does not mean similarity in structure, principles, or objectives.
At the same time, Islamic finance may adopt beneficial institutional practices and operational expertise from conventional markets without compromising its Sharīʿah principles. Islam does not prohibit benefiting from useful knowledge or practices originating outside the Muslim community, provided they remain within Islamic ethical and legal boundaries. Historical examples include contracts such as Mudarabah and Salam, which existed before Islam and were later refined and regulated by it.
Therefore, the claim that Islamic finance is a replica of conventional finance can be understood in two ways. First, it may suggest that Islamic finance merely rebrands conventional products without substantive differences. Those who hold this view bear the burden of proving their claim against the scholarly assessments that approve such products.
Second, it may mean that Islamic finance seeks similar financial objectives while achieving them through Sharīʿah-compliant structures. If this is what is meant, then there is no contradiction, for Allah says: “Allah has permitted trade and forbidden usury."
