Page 19 - Valentino Cattelan - Credere is credit and creed: trust, money, and religion in western and islamic finance

IANUS n. 29-2024 ISSN 1974-9805

is the only original (and final) sovereign, Proprietor and beholder of all the
creation?
The next two sections of this article will be dedicated respectively
- to identify how much risk-sharing in Islamic finance is socially oriented
(hence, with a socially responsible, ethical, moral dimension: the side
morality + religion of the ‘kite’) (section 4),
- and to offer some final critical reflections on the relationship between
credere, credit and money (the side religion + finance) both in Islam and in
Western capitalism (section 5).

4. Does risk-sharing imply social impact? Finance, moral economy, and
Islamic creed

«Those who consume interest cannot stand [on the Day of Resurrection] expect as one
stands who is being beaten by Satan into insanity. This is because that say, “Trade [just]
like interest [riba]”. But Allah has permitted trade and has forbidden interest. So whoever
has received an admonition from his Lord and desists may have what is past, and his affair
rests with Allah. But whoever returns to [dealing in interest or usury] – those are the
companions of the Fire; they will abide eternally therein». (Q. 2:275)

Verse (ayah) 275 of the second chapter (Surah al-Baqarah) of the Qur’an is
usually quoted to summarize (especially with reference to the passage: «Allah has
permitted trade and has forbidden interest [riba]») one of the core operative
concepts of Islamic finance: the prohibition of interest as source of profit and
remuneration of capital.
From an economic and financial perspective, this prohibition necessarily
implies the departure from debt as a source of financing in favour of equity (or
equity-like structures), i.e. a conceptual reformulation of risk-shifting (with
interest as profit for the ‘trade of money’) in the light of risk-sharing, and thus
profit- and loss-sharing as consequent feature of any enterprise and business
managed in accordance with Shari‘ah.
This does not mean that Islamic financial institutions (banks, insurance,
investment funds, ...) always undertake partnerships with financers, clients
(commercial enterprises or common people in need for a financing) and suppliers,
through contracts such as musharakah or mudarabah (the Arabic terms,
respectively, for a full partnership and a silent partnership agreement). Precisely,
what the Qur’an requires is trade instead of interest (as the Arabic term riba is
usually translated) : and legitimate trade, as an activity performed in the real
65

65 The meaning of riba (which covers both usury and interest, as well as any kind of illicit gain
based on a quantitative disequilibrium in the transaction, when things belonging to the same genre
are exchanged one for the other) is investigated in SALEH, Unlawful gain and legitimate profit in Islamic

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