Islamic finance cannot fulfil its purpose simply by removing interest from financial products. Its foundations demand something deeper: ethical conduct, fairness in transactions, shared risk and an economy in which wealth contributes to genuine social benefit. For Muslim communities, the challenge is to ensure that Shari’ah compliance remains rooted in the objectives of Islam rather than becoming a technical label attached to financial products.
Speaking to One Nation Media (ONM), Umer Suleiman, Chief Risk Officer at Wahed, emphasised that Islamic finance must be understood through its broader principles, including the responsibility to prevent harm and ensure that financial activity creates real value.
Beyond the prohibition of riba, or interest, Islamic finance also prohibits gharar, excessive uncertainty or ambiguity in contracts, and maysir, which involves gambling and prohibited forms of speculation.
These restrictions challenge financial arrangements that expose people to poorly understood risks or prioritise speculative gains over productive economic activity.
Islamic finance also emphasises a meaningful connection between financing and real assets, goods, services and enterprise. Risk and reward should be distributed fairly, rather than allowing powerful parties to protect their interests while others bear disproportionate losses.
“The Sharia is always looking to create benefit in society, and real Islamic finance means that there is value creation,” Suleiman told ONM.
This distinction matters in a financial culture that often measures success primarily through profitability. From an Islamic perspective, the questions must extend beyond how much wealth is generated. Muslims must also consider how it is generated, who benefits, who bears the risks and whether that activity contributes meaningfully to society.
Shari’ah compliance must include ethics
One of the key concerns Suleiman raised during his conversation with ONM was the separation of Shari’ah compliance from ethical responsibility. A financial product may satisfy specific contractual requirements, but its wider implications cannot be ignored.
The objectives of the Shari’ah include the preservation of wealth, known as hifz al-mal, alongside the protection of life, faith and other essential human interests. Wealth preservation is therefore not an isolated objective, nor should financial growth come at the expense of human wellbeing.
“No, actually, Sharia compliance includes all of ethics,” Suleiman said.
For Muslim investors and institutions, this requires scrutiny that goes beyond the terminology used to market a product.
A genuinely Shari’ah-compliant approach must consider whether financial arrangements involve exploitation, cause harm or undermine the very principles they claim to uphold.
Compliance cannot be reduced to avoiding prohibited transactions while overlooking the moral responsibilities that give Islamic finance its purpose.
This is particularly important as Islamic financial services expand and attract greater participation. Their credibility will depend not only on the structures they offer, but also on whether those structures reflect the ethical foundations of Islam.
Africa’s opportunity for financial justice
Suleiman also identified Africa as a significant opportunity for Islamic finance, given its large Muslim populations, high levels of financial exclusion and substantial infrastructure needs.
Asset-backed financing can support productive projects by connecting investment to tangible economic activity rather than treating money as an end in itself.
He described the underlying purpose in broader terms: “It’s financial justice, and more than that, it’s kind of generosity, if you look at it.”
South Africa is well positioned to contribute to this development. Its established financial system, Muslim community, history of Shari’ah-compliant investment funds and sovereign sukuk issuance provide a foundation from which it could emerge as a regional hub for Islamic finance.
However, further progress requires clearer regulation, appropriate tax treatment for Islamic financial structures and greater public understanding of how Islamic finance differs from conventional alternatives.
Digital financial services could also widen access, particularly for communities underserved by traditional banking.
As Suleiman explained, “Mobile and digital delivery can let the continent skip the branch banking model entirely, and reach the unbanked directly.”
For Muslim communities, the opportunity extends beyond simply expanding the market for Islamic financial products. It is about building financial literacy, supporting productive enterprise and ensuring that wealth creation is accompanied by social responsibility.
Islamic finance must therefore be judged by more than the absence of riba. Its true promise lies in aligning financial activity with the principles of Islam, economic justice and the wider welfare of society.
