Asset-Backed Financing

All financial transactions in Islamic banking must be linked to tangible assets or legitimate economic activities. Money itself cannot be traded for money. This prevents purely speculative financial dealings and ensures that financial growth is tied to real economic production and value creation. For example, instead of a loan for a car, an Islamic bank might purchase the car and then sell it to the customer at a marked-up price (Murabaha) or lease it (Ijara).