Trade and entrepreneurship remain central to Islamic economic thought, says the expert, urging wider discussion on alternative financial models
NEW DELHI — Islamic finance expert Abdul Raqeeb has called for greater focus on trade, entrepreneurship, organised zakat and ethical financial systems to improve the economic condition of Muslim communities, saying that wealth creation must come before wealth distribution.
“Until wealth is created, how can it be distributed? There is blessing in trade, and the pursuit of lawful livelihood is itself an act of worship,” Abdul Raqeeb said in a recent podcast Deen Aur Duniya with host Saqib Salim.
Abdul Raqueeb, General Secretary of the Indian Centre for Islamic Finance (ICIF), spoke in detail about Islamic economics, modern financial systems and the economic direction of Muslim societies.
He argued that many economic difficulties faced by Muslim communities are not only financial but also intellectual. According to him, while religious practices receive considerable attention, economic activity and business often do not receive the same level of importance despite their place in Islamic teachings.
According to Abdul Raqeeb, this imbalance has contributed to economic weakness in many Muslim societies.
“A society cannot progress only through consumption and distribution. Production and wealth creation are equally important,” he said.
He added that many Muslims have gradually moved away from entrepreneurial activity, resulting in reduced participation in trade and industry.
Responding to questions about Islam’s approach to commerce, Abdul Raqeeb said trade has always occupied an honoured position in Islamic civilisation. He pointed out that Prophet Muhammad was himself a successful trader and that the business activities of Hazrat Khadijah remain an important example in Islamic history.
“Islam did not discourage trade. It provided moral principles such as honesty, trustworthiness and fairness, making commerce a respected and ethical profession,” he said.
He also emphasised that business involves risk and that risk-taking is an essential element of economic growth and innovation.
Referring to a well-known narration often quoted in discussions on trade, he said that a significant portion of livelihood is connected with commerce and business activity.
Abdul Raqeeb highlighted the economic model established in Madinah during the time of the Prophet. He noted that alongside the establishment of the mosque, an independent and transparent marketplace was also created.
According to him, the market operated on principles of fairness, free competition and ethical conduct.
“There was oversight to prevent fraud and exploitation, but there was no monopolistic control. It was a market based on transparency and trust,” he said.
A substantial part of his remarks focused on Islamic banking and financial systems. When asked how Muslims can access financial services while avoiding interest-based transactions, Abdul Raqeeb explained that Islamic finance operates through profit-and-loss sharing mechanisms rather than conventional interest.
He said that Islamic financial institutions are functioning in approximately 75 countries in different forms.
Models such as Musharakah, Mudarabah and Murabaha provide alternatives that are structured around partnership, investment and trade rather than interest-based lending.
“Many people think Islamic finance is only a religious concept, but it is also a practical economic model that is operating successfully in different parts of the world,” he said.
Discussing the Indian context, Abdul Raqeeb observed that although full-scale Islamic banking is not available in the country, alternative arrangements do exist. He referred to cooperative societies and certain non-banking financial institutions that operate with limited or non-interest-based structures.
According to him, these examples demonstrate that alternative financial models can function within existing economic frameworks.
Abdul Raqeeb cited Kerala as an example of how economic cooperation can contribute to social harmony. He said Hindu and Muslim communities in the state often participate in business activities together, creating strong economic interdependence.
According to him, such cooperation helps reduce tensions because prosperity becomes linked to mutual interests.
He also noted that a considerable amount of savings within the Muslim community remains locked in assets such as gold and land rather than being channelled into productive investment.
The discussion also touched upon legal and policy debates surrounding Islamic finance in India. Abdul Raqeeb said that proposals relating to alternative financial systems have faced legal scrutiny in the past.
However, he argued that any financial model that contributes to economic development and social welfare deserves serious consideration rather than outright rejection.
One of the most significant parts of his remarks focused on zakat. Abdul Raqeeb described zakat not merely as a religious obligation but as an economic institution designed to circulate wealth within society.
He expressed concern that zakat today is largely distributed at an individual level, limiting its wider economic impact.
“The issue is not the amount of zakat available. The issue is how it is organised and utilised,” he said.
According to him, much of the zakat collected is used for immediate relief and short-term needs, which certainly helps recipients but often fails to create lasting economic change.
He suggested that organised committees at local mosques could manage zakat funds more effectively and direct resources towards education, skill development and support for small businesses.
“If zakat is managed institutionally and invested in human development and entrepreneurship, it can play a major role in reducing poverty,” he said.
Drawing on his own experience, Abdul Raqeeb said that business success should not be measured only by profits. He explained that every commercial activity carries both opportunities and risks.
“People often see the gains but ignore the losses. Real success comes through patience, balance and long-term thinking,” he said.
Concluding his remarks, Abdul Raqeeb stressed that Islam encourages a balance between spiritual and material well-being. He said hard work, ethical conduct, lawful earnings and social responsibility are all part of the Islamic way of life.
“Religion and worldly affairs are not in conflict. They complement one another when guided by moral principles,” he said.
Abdul Raqeeb maintained that Islamic economics, trade, zakat and ethical finance are interconnected elements of a broader economic vision. He argued that if these principles are implemented collectively and effectively, they can contribute not only to economic growth but also to greater social justice, poverty reduction and community development.
