Islamic Investment: The Answer to Improving People's Welfare

Abstract

In Islam, Islamic investments refer to the process of investing money and time in businesses or assets that adhere to Islamic principles. Islamic investments can also be considered as a combination of financial management and Islamic principles, where the primary principle in Islamic investments is avoiding usury (interest), excessive speculation, and avoiding businesses involved in prohibited industries such as alcohol, gambling, or other activities considered reprehensible. In this context, Islamic investments have specific requirements, such as involving lawful businesses, and capital can be invested through various modalities such as Mudharabah, Musyarakah, Wadiah, and others. Islamic principles such as trusteeship, reasoning by analogy, Qardhasan, and agency must also be followed. This research aims to provide insights into Islamic investments for the betterment of society in a particular country using secondary data and a quantitative approach. The study reveals that Islamic investments differ from conventional investments due to their operations being consistent with Islamic principles and offer opportunities for economic stability in a country.