IRP 81 – Debt from Shariah and Economic Perspectives: Concepts, Issues and Implications

Stakeholders in the Islamic finance industry have been debating the relative importance of debt-based and equity-based financing for decades. Islamic economists generally advocate a shift toward equity-based instruments while some Sharīʿah advisors and practitioners defend the existing reliance on debt-based instruments. This research is intended to explore this issue and provide a framework for understanding it.