Iwm 5

• The Components of IWM

  • Wealth Creation
  • Wealth Accumulation
  • Wealth Protection
  • Wealth Distribution
  • Wealth Purification
• Wealth Creation


  Islam encourages Muslims to pursue wealth, which is in fact a struggle (jihad) espoused in Islam<|>The purpose of acquiring wealth is to create earnings to support one's family to enable them to maintain either a current lifestyle or a desired lifestyle<|>To attain this financial freedom objective in life, acquisition of wealth can either be through employment, business or one's heritage<|>In Islam, the creation of wealth must be conducted in a manner approved by the Shariah<|>Seeking, creating, and acquiring wealth through non-Shariah means or those contrary to the teachings of Islam is strictly prohibited
• Islamic Entrepreneurship


  Entrepreneurship as a part of Islamic economics and businesses is related with the pursuit of opportunity beyond resources controlled<|>Every business and entrepreneurial activities that are consistent with the Islamic teachings are considered as the worship to Allah SWT<|>Islam encourages all the Muslims to engage in the business activities
• Prophet's hadith: 'A businessman who is truthful and trustworthy whom will be honored with a special position in the Hereafter along with the Prophets, the truthful men, and the martyrs on the Day of Resurrection'
• Characteristics of the Prophet's business success

  • Siddiq (truthfulness)
  • Amanah (honesty/trustworthiness)
  • Tabligh (deliver/communicate/covey/share/reveal/report)
  • Fathanah (intellectual/emotional/spiritual intelligence)
• Classification of Shariah Contracts

  • Exchange-Based Contracts
  • Charity-Based Contracts
  • Waiving Contracts
  • Partnership Contracts
• Exchange-Based Contracts


  Contracts which are entered into by two transacting parties to acquire ownership of an asset or commodity leading to the transfer of ownership of the exchanged countervalues<|>Can be classified into sale-based contracts and lease-based contracts
• Charity-Based Contracts


  Contracts affected by someone on the basis of benevolence (ihsan) and cooperation (ta'awun), and do not require the exchange of something for another<|>Asset ownership is required without any countervalue
• Waiving Contracts

  Contracts which are entered into by someone to waive a right that has been established in one's liability whether with or without a countervalue<|>If it is effected without a countervalue, then it is called purely waiving contract
• Partnership Contracts


  Contracts which are entered into for the purpose of having a partnership in work and profit<|>Founded upon the spirit of cooperation and partnership in the sense that profits are shared by the partners based on a mutually agreed profit ratio, and losses are borne by both of them according to their respective capital contributions respectively
• Seeking, creating and acquiring wealth through non-Shariah means are strictly prohibited
• Invalidating & Corrupting Factors of Financial Contract

  • Riba: Interest and usury
  • Gharar: Uncertainty
  • Darar: Harm/Damage
  • Intihak al-Hurmah al-Shar'iyyah: Violation of the Shariah sanctity
• Riba

  Literally means excess, expansion, increase, addition or growth<|>Technically means an excess over and above the principal of loan without any countervalue<|>Also defined as an unlawful gain derived from the quantitative inequality of the countervalues in any transaction purporting to affect the exchange of two or more species which belong to the same genus and are governed by the same legal cause
• Types of Riba

  • Riba al-duyun
  • Riba buyu'
• Riba al-duyun


  An increment charged on debt principal in consideration of the repayment period<|>Also known as interest due to a loan or penalty due to late payment
• Riba al-buyu'


  An increase in the measure (weight or volume) of one of two countervalues of the same genus as prescribed by the Prophet (s.a.w.)<|>Exchange contract should observe: it must be affected on the spot basis, and it is done at par or in equal unit of measurement if the exchanged countervalues are of the same genus and denomination
• Types of Riba al-buyu'

  • Riba al-Fadl: an increase in the measure (weight or volume) of one of two countervalues of the same genus in an exchange contract of ribawi items
  • Riba al-Nasi'ah: an increase due to deferment one of the countervalues in an exchange between ribawi items of the same genera
• Gharar


  Literally means risk, uncertainty and hazard<|>Technically means the characteristic of a contract where the outcome is unknown or uncertain or it has the element of deceit
• Darar


  Harm/damage is the third main factor that invalidates or defect contract in Islamic jurisprudence<|>Based on the hadith "No harm should be caused, and harm must not be countered by harm"
• Intihak al-Hurmah al-Shar'iyyah


  Violation of Shariah sanctity by the contracting parties in their dealings<|>The violation could arise from the contracting parties or subject matter of the contract
• Examples of prohibited commercial contracts due to Shariah sanctity violation

  • Sale of unpurified items such as pork, liquor
  • Sale of prohibited items such as pornographic items, stolen items
  • Prostitution (mahr al-baghy)
  • Sale during prohibited time such as sale during the sermon of Jumu'ah prayer (for men)
  • Sale of prey hunted by a muhrim (a person who is performing hajj or 'umrah and still in ihram state)