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Durham University

Research & business

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Publication details for Professor Muhammed-Shahid Ebrahim

Darrat, Ali F. & Ebrahim, Muhammed-Shahid (1996). On the Design of Interest-free Instruments. Journal of King Abdulaziz University: Islamic Economics 8(1): 53-61.

Author(s) from Durham


The main purpose of this paper is to present a theoretical model of an alternative fund-raising scheme for Muslim governments which are restricted by religious regulations against 1ixed-inçrest debt financing techniques. The proposed instrument is developed using the principles of a partial equilibrium theory for risk neutral as well as risk averse investors, The paper concludes with theoretical and empirical discussions on the elficiency of the financial instrument proposed.