When managing your finances, what do you usually consider? Australians usually want to spend their wealth on things that have value or put it towards a cause. This cultural trait of the community has contributed to the country being rich in diversity. Surprisingly enough, this is also reflected in how they manage their money, just like those who shifted to Sharia finance, that, even if the concept is rooted in Islamic values, its principles are rooted in ethics and fairness, something that Hejaz Financial Services goes even beyond religion.

What Is Sharia Finance?

Sharia finance is a way of managing money that, although initially adhered to Islamic law known as Sharia, its principles still focus on the humane way of living life: fairness, transparency, and avoiding harm to anyone. And it is unique for quite a number of reasons:

  • Sharia finances encourage shared responsibility and fair profit-sharing instead of charging and earning interest on your savings.
  • Their investments are considered ethical, in which money can’t be invested in industries that are harmful to people, and that it considers real-world value, where real economic activities are a must instead of worldly, “get-rich-quick” schemes.

How Does Sharia Finance Work?

Here are financial systems from Sharia finance and traditional systems you might want to look into:

Home financing without interest. For Sharia finance, interests are something that is harmful to the society, so usually the bank and the buyer work together on a tangible asset by selling the property to you at a marked-up price or what we know of as cost-plus financing, and the other method is the bank buys the property and leases it to you or what they call lease-to-own. Sharia finance emphasises the importance of partnerships with clear and understandable terms for both parties.

Ethical investments. Investing responsibly is one mantra that Australians do, and Sharia finance aligns closely with this mindset, avoiding the industries that harm and even exploit living things. You will notice that Sharia finance mostly focuses on renewable energy or even healthcare and all other things sustainable to the community.

Islamic insurance. Islamic insurance is a cooperative system where participants pool their money to support one another in times of need. This is like a financial safety net within employees where everyone has a profit at the end of the year but can lend some financial support to members of the cooperative if they need it at the moment.

Why It’s More Than Just Finance

Sharia finance changes the system because it prioritises fairness and community well-being and not the traits of the traditional system that do not benefit the client just as much as they benefit the bank and the establishment. In this new way of financing, even the people are treated as of high value, and not just material things and money.

Social responsibility held in high regard

The values of inclusivity and diversity in Australia should not only reflect in their culture but in their everyday lives as well. Finance is one of those systems that can make or break a society, so it should also reflect the values we uphold.