Islamic finance terms explained for real investing decisions.
Each glossary page goes beyond a one-line definition with practical examples, investor checklists, common mistakes, FAQs, tools, and related Academy guides.
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Learn the vocabulary by workflow, not alphabetically.
Most users do not need a dictionary. They need to know which terms affect a stock screen, a zakat calculation, a home finance contract, a sukuk fund, or a takaful policy.
Screening and purification
Terms used when checking stocks, funds, ratios, and non-compliant income.
Zakat and wealth
Terms used when calculating zakat, thresholds, and investor recordkeeping.
Contracts and structures
Common Islamic finance structures used in banking, home finance, funds, and business finance.
All terms
Full glossary index
Riba
Prohibited interest or unjustified increase in a financial exchange.
Gharar
Excessive uncertainty or ambiguity in a contract.
Sukuk
Islamic certificates structured around asset ownership or usufruct rather than conventional debt interest.
Takaful
Islamic insurance based on mutual assistance and Shariah-governed risk sharing.
Murabaha
A cost-plus sale where the seller discloses cost and profit markup.
Mudarabah
A partnership where one party provides capital and the other provides expertise or management.
Musharakah
A partnership where parties contribute capital and share profit and loss.
Purification
The process of disposing impermissible income from otherwise screened investments.
Nisab
The minimum wealth threshold used to determine whether zakat is due.
Zakat
An obligatory annual charity due on qualifying wealth for eligible recipients.
AAOIFI
A standards-setting body for Islamic finance accounting, auditing, governance, ethics, and Shariah standards.
Shariah Screening
The process of reviewing business activity and financial ratios for halal investment suitability.