The Role of Islamic Finance in Fostering Circular Business Investments: the Case of OIC Countries

The linear economic approach described as the "take, make, dispose of" model where the bulk of the material used to make products is ultimately thrown away is recognized as a contributor to the natural resource constraints faced by humanity. Responding to this problem requires an economic...

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Bibliographic Details
Published inJournal of economic cooperation & development Vol. 41; no. 1; pp. 89 - 120
Main Authors Ibrahim, Abdul-Jalil, Shirazi, Nasim S
Format Journal Article
LanguageEnglish
Published Ankara Statistical Economic & Social Research & Training Centre for Islamic Countries 2020
Subjects
Biodiversity
Business models
Circular economy
Climate change
Companies
Consumption
Earth
Economic growth
Economic models
Environmental economics
Environmental impact
Finance
Financial institutions
Investments
Islam
Islamic financing
Regulatory reform
Reuse
Sustainability
Sustainable development
Sympathy
Working groups
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Summary:The linear economic approach described as the "take, make, dispose of" model where the bulk of the material used to make products is ultimately thrown away is recognized as a contributor to the natural resource constraints faced by humanity. Responding to this problem requires an economic paradigm of "reduce, reuse and recycle" conceptualised as Circular Economy(CE). The paper explores ways Islamic finance can support circular businesses within OIC countries to achieve economic growth that is not at the expense of the environment. The study concludes that Islamic finance can use compassionate contracts, equity-like, and risk-sharing financing modes to support circular businesses motivated by the holistic objective of Maqasid.
ISSN:1308-7800