Islamic Finance History, Theory and Development in Luxembourg Section Articles


Dr. Sabbah Gueddoudj


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.



ALFI. (2017). Islamic Fiance. Retrieved from
Ashfaq, A., Malik, M. I., & Humayoun, A. (2010). Banking developments in Pakistan: A journey from conventional to Islamic banking. European Journal of Social Sciences, 17(1), 12-17.
Descartes, R. (1664). L'Homme, Paris. (In French.) Digitized photographic reproduction. Retrieved from x004x0381.pdf
Iqbal, Z., & Mirakhor, A. (2013). Economic development and Islamic finance (Series on Directions in Development). Washington, DC: The World Bank.
Ghazanfar, S. M. (2000). The economic thought of Abu Hamid Al-Ghazali and St. Thomas Aquinas: Some comparative parallels and links. History of Political Economy, 32(4), 857-888.
Ghazanfar, S. M. (2003). Review of Medieval Islamic economic thought: Filling the “Great Gap” in European economics. In S. M. Ghazanfar (Ed.), Islamic Studies Series. London/New York: Routledge/Curzon, 2003.
Keynes, J. M. (1936). The general theory of employment: Interest and money. London: Macmillan.
Kuran, T. (1997). Islamism and economics: Policy implications for a free society. In Sohrab Behdad & Farhad Nomani (Eds.), Islam and Public Policy (International Review of Comparative Public Policy, v. 9). Greenwich, Conn.: JAI Press.
Mandeville, B. (1714). The fable of the bees, or, private vices, public benefits, Oxford: Clarendon Press.
Marx, K., Engels, F., Moore, S., & McLellan, D. (1992). The Communist manifesto. Oxford: Oxford University Press.
Naqvi, S. N. H. (2003). Perspectives on morality and human well-being: A contribution to Islamic economics. Markfield, Leicestershire, U.K.: The Islamic Foundation.
Robbins, L. (1935). An essay on the nature and significance of economic science. London: MacMillan.
Smith, A. (1759). The theory of moral sentiments (v. 1). In W. B. Todd (Ed.), The Glasgow Edition of the Works and Correspondence of Adam Smith. Oxford: Clarendon Press.
Smith, A. (1776). An inquiry into the nature and causes of the wealth of nations. In W. B. Todd (Ed.), The Glasgow Edition of the Works and Correspondence of Adam Smith. Oxford: Clarendon Press.
Van der Wee, H. (2000). European banking in the middle ages and early modern times (476–1789). In H. Van der Wee, & G. Kurgan-van Hentenryk. (Eds.). A History of European Banking (2nd ed). Antwerp, Belgium: Mercator.
Yussof, S. A., & Haron, R. (2017). The ASEAN market: Cross-Border collaboration in Islamic Finance between Malaysia and Thailand. Islamic Banking and Finance Review, 4, 21–39.