Takaful vs. Insurance.

The article, Conceptual and Operational Differences between General Takaful and Conventional Insurance by Mher Mushtaq Hussain and Ahmad Tisman Pasha, argues that there is a need to ensure the differences between the insurance business under the Islamic system and conventional system. The issues in the article, in my opinion, are structured in a comprehensible and effective manner. It first presents the idea of the need for insurance by describing risk, explaining the fundamental concept of an insurance agreement, and how engaging in an insurance contract results in minimizing the risk involved. Subsequently, the author gives a rather deep facts on Islamic insurance (Takaful) by defining and listing out its various models. The article is then followed by the many differences in the conceptual and operation framework between Takaful and conventional insurance mainly due to elements found in insurance contracts which are prohibited in Islamic transactions, such as uncertainty (gharar), interest (riba), and gambling (maysir).

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Islamic Microfinance.

The article titled “Islamic Microfinance: An Ethical Alternative to Poverty Alleviation”, written by Abdul Rahim Abdul Rahman, sets out to show the potential of Islamic financing schemes for micro-financing purposes. According to the author, Islamic finance plays an important role in contributing for furthering socioeconomic development of the poor and small (micro) entrepreneurs without charging interest (riba’). The various ethical schemes and instruments that can be adapted for the purpose of microfinance which is offered by the Islamic finance are intensely conversed in this article. The author argues that the main objectives of microfinance schemes to alleviate poverty and to enable the poor to empower themselves are inline with the four Islamic ethical principles and the economic principles of justice.

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