Fiqh Muamalah: Building an Islamic Economic System on Justice and Transparency
One afternoon, I sat in a coffee shop near the market and overheard a conversation between two small traders who had just been ‘robbing Peter to pay Paul’ to cover their high-interest online loan instalments. One of them murmured softly, almost to himself, ‘They say it’s Sharia-compliant now, but honestly, it doesn’t feel any different from the old ones.’ This question—whether the Islamic economy we are building today is truly founded on justice or is merely a rebranding exercise—is one that haunts many. It is this very question that led me to revisit the pages of Fiqh Muamalah, the branch of Islamic jurisprudence governing economic relations between people. Far from being a rigid list of halal and haram, Fiqh Muamalah is actually a blueprint for how Islam envisions a humane economic system, where profit is not gained through oppression and growth is not achieved at the expense of the vulnerable.
Many people think Fiqh Muamalah is merely a set of rules on the permissibility of a transaction. However, if we trace its roots, Muamalah stems from Islam’s fundamental perspective on wealth itself. In the Qur’an, Allah says: ‘And give them from the wealth of Allah which He has given you’ (QS. An-Nur: 33). This verse affirms a basic principle: the wealth we possess is, in truth, a bounty from Allah, not an absolute possession we can treat as we please. From this worldview emerges a well-known jurisprudential maxim among students of Muamalah: al-ashlu fi al-mu’amalati al-ibahah—in principle, all forms of economic transactions are permissible unless there is clear evidence prohibiting them. This maxim explains why Islam is so open to economic innovation, provided it does not violate the established boundaries.
The most frequently discussed boundary is, of course, the prohibition of riba. Allah states firmly: ‘And Allah has permitted trade and has forbidden riba’ (QS. Al-Baqarah: 275). I often encounter the misconception that the prohibition of riba is only about bank interest in a literal sense. Upon deeper reflection, this prohibition is fundamentally about justice in risk-bearing. Riba, in many contemporary scholarly studies, is essentially a mechanism where the capital owner is guaranteed a profit without having to bear any business risk, while the borrower shoulders the entire burden alone, whether they profit or lose. Compare this with a mudharabah scheme, where the capital provider and the business manager share both profit and loss according to a pre-agreed ratio. Herein lies the justice offered by Fiqh Muamalah: risk must not be entirely shifted onto the party in a weaker position.
The story of the small traders in the coffee shop reflects this same problem: many financing products claim to be Sharia-compliant, but in practice, the risk is still fully borne by the customer, exactly like a conventional loan. The spirit of mudharabah and musyarakah contracts is the exact opposite. The Prophet Muhammad ﷺ himself, as narrated in various books of prophetic biography, once managed Khadijah’s trade capital under a profit-sharing scheme before his prophethood—a practice demonstrating that justice-based cooperation is not a new concept but was practised long before modern banking institutions were born.
Beyond riba, Fiqh Muamalah also emphasises the prohibition of gharar, which is ambiguity that has the potential to harm one party. The Prophet Muhammad ﷺ said: ‘The Messenger of Allah ﷺ forbade gharar transactions’ (Hadith narrated by Muslim). In today’s digital age, this prohibition finds new relevance. It is not just about goods of unclear form; modern gharar can take the shape of contracts filled with complex jargon, causing a customer to sign something they do not fully understand. Data from the Financial Services Authority (OJK) indicates that the level of Sharia financial literacy in our society is only around 40 per cent, while the number of people actively using such services is even smaller.
A common critique I hear from fellow activists and Sharia economics academics concerns the phenomenon of ‘superficial Sharia’—a term often used to describe products that formally meet the requirements of a contract but whose substance is almost indistinguishable from conventional products. I believe this criticism is not without basis. As long as fatwas and contracts are used merely as tools of legitimation without a corresponding change in the mindset about risk and justice, our Islamic economy will continue to be shadowed by public doubt. Ultimately, Fiqh Muamalah is not just a dusty heritage of classical texts meant only for classroom study. It is a living ethical framework that constantly invites us to re-examine every economic practice we engage in daily: is it truly just, or does it only appear just on the surface? Hopefully, more of us—industry players, academics, and the general public alike—will not stop at the Sharia label alone.