Islamic Finance History, Theory and Development in Luxembourg Section Articles

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Dr. Sabbah Gueddoudj

Abstract

The aim of this paper is twofold. The first aim is to demonstrate that Islamic finance is an alternative to conventional finance in the western world. Often viewed as a religious service in non-Muslim countries, Islamic finance has been excluded from economic funding, unfortunately. This exclusion is partly linked to a lack of knowledge about Islamic finance in Europe. Most of the time, Islamic finance is associated with Islamic religion without taking into account economic concerns. An exercise of comparison between Islamic principles and various monetary schools of thought demonstrates that there are similarities between them and that Islamic finance cannot be perceived without understanding core economic and financial rules. The second aim of this paper is to evaluate the position of Islamic finance as ethical finance in Luxembourg and its various perspectives. The main conclusions are 1) Islamic finance should be studied through an economic prism, 2) Islamic finance in Luxembourg has steadily increased but, 3) its share in financial instruments is still very low despite the openness towards non-conventional finance funding in Luxembourg.

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