Islamic Finance and SRI: The Expectations Gap
In any chosen business it is well known that meeting customer expectations is a hard task. But taking Islamic finance and socially responsible investing (SRI) into consideration, the gap between expactations and practice is even larger.
In practice, other than refusing to finance ‘sin' industries, these expectations are hard to meet. Although it is expacted a profit sharing, most of the financing in the Islamic financial sector is debt based, therefor the form of financing is changed to that of a sale or a lease without necessarily changing its economic substance.