EMIEF740 Islamic Finance Contracts

Course Description:

The course aims to clarify the theory of the different modes of finance, addressed by scholars both in the past and present on one hand, and contracts and financial issues arising from the development and practices of Islamic finance industry and its institutions on the other. The module will explore nominated financial contracts as explained in Islamic jurisprudence, and the derived or structured financial instruments that were developed as a result of the need for financial inter-mediation from an Islamic perspective.

Course Code: EMIEF740

Credit hours: 3

Pre-Requisites: None

Learning Objectives:

The students are expected to acquire a vision of the main Islamic modes of finance and contracts where mainstream and Islamic positions interface for a solution in an integrative / legal approach. This approach will help students face ground realities with confidence in dealing with facts in their future articles and paper writings.

Course Outlines:

  • Some Preliminary Points: This includes the Belief in divine guidance, the difference between capitalist and Islamic economy, Capital and entrepreneur, and the present practices of Islamic Banks.
  • Musharakah: This includes the definition of Musharakah, the kinds of Musharakah the rules of Musharakah, Distribution and Ratio of profit, sharing of loss, termination of Musharakah, and Diminishing Musharakah.
  • Mudarabah: This includes definition of Mudarabah, the kinds of Mudarabah, distribution of Mudarabah, termination of Mudarabah, combination of Mudarabah, and Musharakah and Mudarabah as modes of financing.
  • Murabahah: This includes definition of Murabahah, some basic of sale, Bai`Muajjal, Murabahah as a mode of financing, Guaranteeing the Murabahah, Securitization of Murabahah, and some basic mistakes in Murabahah financing.
  • Ijarah: Its definition, basic rules of leasing, determination of rent, the commencement of lease, Variable rentals in long term leases, termination of lease, and securitization of Ijarah.
  • Salam and Istisna: definition of Salam and Istisna, conditions of Salam, Salam as modes of financing, difference between Istisna and Salam, difference between Istisna and Ijarah, and Istisna as a mode of financing.
  • Islamic Investment Funds: This includes the principles of Shariah governing Islamic investment funds, Equity Funds, conditions for investment in shares, Ijarah fund, Murabahah fund, Bai`al-dain, and mixed fund
  • The Principle of limited liability: This includes Waqf, Baitul-Mal, Joint stock, and Inheritance under debt.
  • Sample of different contracts
  • Case Study: Contracts of the Islamic Mortgage Companies in the US

Main Textbook

Introduction to Islamic Finance by Mufti Taqi Othmani

Miscellaneous online papers and others by the instructor.

Grading and Evaluation:

  • Minimum passing grade 70%
  • Participation: 30% (10 assignments, 3% each)
  • Mid-Term exam: 20%
  • Research paper: 20%
  • Final exam: 20%
  • Oral Exam 10%

Guidelines for Research Paper:

As part of the course, you are required to submit a research paper. The topic chosen must be relevant to the course and approved by the Instructor. The paper must meet the following requirements:

At least ten (10) double-spaced pages (not including the introduction and conclusion).

1 inch margins.

12 pt size (Times New Roman).

Follow the standard research paper structure with a Table of Contents, Abstract or Executive Summary, Introduction, Main Body, Conclusion, List of Reference.

The Main Body should be organized into logical chapters and paragraphs.

When quoting Hadith, a notation indicating its authenticity must be clearly.

Please Watch:

How To Write A Research Paper

Communication Etiquette:

  • Post all your questions related to the course to the (Online Test) forum.
  • If sending emails directly to the lecturer, please include appropriate label in the subject line (Action Required/Info/Admin) and allow up to 3 working days for reply.
  • Limit telephone communication with the Lecturer to within specified office hours only.
  • When leaving a voicemail, please clearly state your name, course code, and contact number.

To attend live – online lectures (on their scheduled time):

Virtual Class Room

Access the course on-line by logging into Online School, accessible from

Al-Huda Online School

You will need a user name and password to:

  • View the recorded lectures if you missed the live online ones.
  • Interact with your teacher and classmates.
  • Upload and submit your assignments, research papers, and exams.
  • View your grades.
  • All attempt must be made to submit assignments by the agreed due dates. Late submissions will be penalized.
  • Weekly materials and graded assignments will be posted onto the site by Monday– in sha Allah.



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