The Notion of No Risk No Gain In Islamic Finance
In one of his sayings, the Prophet asserted that the entitlement to the return on an asset relates to the risks of ownership i.e. “al-kharaj bi al-dhaman.” Based on this hadith, Muslim jurists developed a legal maxim “al-ghurm bi al-ghunm” or gain is justified with risk. Both imply that the entitlement to a return is…