Credit leads to an increase in spending, thus increasing income levels in the economy. This, in turn, leads to higher GDP (gross domestic product) and thereby faster productivity growth. If credit is used to purchase productive resources, it helps in economic growth and adds to income.
The essence of giving credit is to stimulate economic activities in the country and empower people. Islamic finance credit can also be deployed to support the growth of real sectors through trade/financing arrangements and the adoption of technology to reach out to various economic agents.
This edition of Islamic Finance Weekly anchored by Bukola Akinyele-Yisau features Dr. Mustapha Abubakar, Co-Founder Intellectical Consulting Limited. He speaks on "Benchmarking Non-Interest Credit Finance Products Prices" According to him, there is a need for alternative benchmarks to be used in Islamic finance.
While it is fairly straightforward to create a pricing mechanism on a project basis, deeper understanding and most importantly a desire to develop a suitable nation-based benchmark are required. Key stakeholders from economists, bankers, policymakers, and Sharia scholars need to synergize efforts for this to be achieved.