Sample Essay
The war torn region of Afghanistan has also seen significant popularity of Islamic banking and Islamic Commercial Law. Men and women looking to rebuild their lives after the wars in Afghanistan have taken to taking out microfinance loans for small scale industries and entrepreneurial businesses. The products and services that are developed under the Islamic Commercial code are better received by the public inAfghanistanas compares to the traditional products for lending as they do not include the concept of an additional interest payment.
Moreover the Murbaha practice is also advantageous for the business as it minimized costs of capital by apportioning it over a period of time. “Paul Robinson, FINCA’s country director inAfghanistan, says not only are the products better received than conventional forms of lending, the Murabaha practice is also better for business. ‘The advantage of Murabaha loans is that 100 per cent of the money goes into the business. When you do small business lending at Bank of America for instance and you are a small business, as a banker, I would give you a cheque with the name of the store, rather than giving the borrower cash to make sure all the money goes into the business,’ Robinson says” (Zafar, 2009). As a result the popularity of the Islamic banking products and Islamic Commercial code is lending a helping hand to the redevelopment ofAfghanistanwithout putting strain on the people for recovering from the devastations of war and the Taliban.
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