islamic investment product

Islamic Investment Products
Customers who invest in Islamic financial products would not benefit in the form of interest, but the percentage of profit sharing (ratio) of bank profits from managing clients' money. For example, 55 percent of profits to customers and 45 percent for the bank.

However, the profit-sharing system, although the ratio agreed upon from the beginning, the customer and the bank can not know for sure that the result will be acceptable to both sides, before the results of operations of the bank's profits are known at the end of the given period. Unlike the system of interest, where customers know the results to be obtained from the start-in the form of a percentage interest of the money which he investment-whatever profits or losses of the business of the bank. However, the profit-sharing system, the customer and the bank share profits more fairly, the customer gains could be larger than the system of interest.

                                BY: TRI AYU RIWAYANI (11220035)

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Why does Islamic Economics need to be applied in Indonesia?

Some reasons why Islamic Economics needs to be applied, here they are:

1. Most of people in Indonesia are Muslim. So, it’s proper to be applied.

2. Islamic Economics is universal to be applied for all people even they are non-Muslim. It’s because of Islam is “Rahmatal lil Alamin”. Islamic Law can be applied to all human.

3. Islamic Economics can decrease the poverty in Indonesia. Why? In Islamic Economics there’s system named “Mudharabah” is a special kind of partnership (a trustee profit sharing) where one partner gives money to another for investing it in a commercial enterprise. The profit-loss sharing ratio is agreed by all parties. So, someone who doesn't have a capital to make a commercial enterprise can just still make it by a capital given to him/her. By this system, someone can be helped to make a job field and it certainly decreases the poverty.

4. There’s no interest, fraud, mudharat, gambling, immoral, etc in Islamic Economics

5. Islamic Economics prospers all of parties, include weak people.

6. Efficacy of Islamic Economics and finance have been tested, as when the financial crisis in 1997, Islam was the only business that still prevail, even able to generate operating profits doubled, while that time many banks and other businesses had collapsed and liquidated.

By seeing the advantages of Islamic Economics, so I recommend that Islamic Economics can be applied in Indonesia well. Not only just the name, but the implementation of Islamic Law applies as well.

(by: Mudawamah – 11220079)

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