1. From Bosnia to Global Islamic Finance
Your journey spans Bosnia, Malaysia, Iran, Saudi Arabia, and Pakistan. How did you, with a background in economics and Islamic revealed knowledge from IIUM, become a global figure in Islamic finance? What were the pivotal moments that shaped your international career?
Back in the 1990s, when I was finishing high school and preparing for university, I knew very little about Islamic finance. At that time, Bosnia and Herzegovina was recovering from a devastating conflict that had severely impacted its economy, and things felt quite uncertain. As a graduate of an Islamic high school, I had a strong desire to pursue business and economics.
During this period, Malaysia was emerging as a rapidly developing country with a majority Muslim population, and I was eager to learn from their success. When I began my studies at the International Islamic University Malaysia (IIUM), they offered a new double-degree program in Economics and Islamic Studies. Excited about the opportunity, I enrolled in the program, which introduced me to the field of Islamic finance.
Initially, I aimed to earn my double-degree, but this journey opened many more doors for me in the growing Islamic finance sector. I believe it was part of a larger plan, as we can have our own aspirations, but ultimately, things unfold as they are meant to. This initial step in my education led to my master’s thesis focused on Islamic finance, which eventually resulted in a job at the International Shari’ah Research Academy (ISRA). This experience marked the beginning of my professional journey in Islamic finance, and the rest, as they say, is history.
2. Academia and Practice: A Dual Career
You are an Associate Professor of Finance at Effat University while also serving as Global Shari’ah Coordinator for a fintech startup in Pakistan and founding an educational platform. How do you balance academic rigor with practical industry application? How does each role inform the other?
I take pride in having both academic knowledge and real-world professional experience. Throughout my career, I’ve worn many different hats and successfully tackled a variety of challenges. Your question seems to suggest that academia and real-world experience are completely separate, but I don’t agree with that. I believe they go hand in hand. We often turn to academic research to help solve new problems that professionals face, and at the same time, we use our work experiences to test and refine new ideas and theories. I constantly aim to connect these two worlds—education and industry—because without that connection, it would be difficult for me to succeed. In my opinion, we need more partnerships between academia and the professional world to benefit everyone involved.
3. The IILM Experience and the First Short-Term Islamic Instrument
During your time at the International Islamic Liquidity Management Corporation (IILM), you played a key role in developing the first short-term Islamic instrument with global consensus. Can you tell us about that achievement? What were the biggest challenges in achieving global consensus among diverse Shari’ah boards?
My transition from ISRA to IILM was a significant and challenging step in my career. I moved from engaging in research discussions to participating in various professional board meetings, which felt like entering a whole new world. At IILM, I found myself surrounded by experienced professionals from Wall Street, many of whom were not familiar with Islamic finance. Despite our diverse backgrounds, everyone at IILM worked well together, creating a strong team dynamic aimed at achieving the goals set by IILM’s founders.
Our mission was to develop a globally accepted Islamic finance product. This task was made more complex by the differing opinions among Muslim scholars worldwide and the various legal systems we needed to consider. It created a dynamic and sometimes challenging environment. We managed to devise a working solution fairly quickly, but getting everyone to agree took longer than expected.
One of our biggest hurdles was securing support from financial institutions that were meant to partner with us, both locally and internationally. While many were open to our ideas, a few were more conservative and hesitant. Rather than replace those institutions, we were committed to building something that would be widely accepted and solid from a religious perspective. This determination led us to work hard to address any concerns and ensure everyone was aligned, as we originally intended.
I’m proud to see the IILM program thriving after all these years and to know that I played a key role in its development and in securing its approval from a religious standpoint.
4. Islamic vs. Conventional Finance: From a Scholar’s Perspective
You have worked across Islamic banking, capital markets, and fintech. From your academic and practical experience, what is the most fundamental difference between Islamic and conventional finance that is often misunderstood? How do you explain it to your students?
The most common misunderstanding is that Islamic finance is simply conventional finance with the word “interest” replaced by “profit.” That framing misses the real difference, which is about the source of a return and the relationship between the parties.
In conventional finance, money can be lent as a commodity in its own right, and the lender earns a predetermined return on the loan regardless of how the borrower’s venture performs. Islamic finance rests on a different principle: money is a medium of exchange and a store of value, not something that generates a return by itself. A return is legitimate when it comes from real economic activity and is tied to risk-taking, whether through trade, leasing, or partnership. This is why riba (interest) is prohibited, alongside excessive uncertainty (gharar) and speculation (maysir). The financier is expected to share in the economic risk of the underlying activity, not stand outside it.
I explain this to my students with a simple example. When you finance a car with a conventional loan, the bank lends you money and charges interest on it. In an Islamic structure such as murabaha, the bank must actually purchase and own the car, bear the risk of ownership for a period, and then sell it to you at an agreed, disclosed markup. The bank earns its profit from a genuine sale of a real asset, not from the passage of time on a loan. Once students see that, the conversation moves from “what is the label?” to “what is the substance?”
I also encourage them to be honest about the gap that can exist between the ideal and the practice. The real test of any Islamic product is whether it reflects these principles in substance, not only in legal form. That is an essential discussion for the future of the industry.
5. Islamic Home Financing in Saudi Arabia
Your publication on “Islamic Home Financing in Saudi Arabia” examines the Malaysian approach. What are the key differences between these markets? What lessons can Saudi Arabia and other markets learn from Malaysia’s model, and vice versa?
My article was written in 2009, when Saudi Arabia was waiting for its mortgage law. The focus was the Saudi market and the Shari’ah-compliant structures banks used there. Malaysia is a natural benchmark for it, and the differences between the two markets are instructive.
The biggest difference is how the two markets deal with legal and Shari’ah certainty. Malaysia built a formal system: the Shari’ah Advisory Council at Bank Negara has binding authority over Islamic financial business, and the Islamic Financial Services Act 2013 gives the sector a dedicated legal framework. Courts refer Shari’ah questions to the council, thereby reducing disputes and inconsistencies. Saudi Arabia works differently. Shari’ah is the foundation of the legal system, but each institution relies on its own Shari’ah board. What Saudi Arabia has done well is build the housing ecosystem. The real estate finance laws of 2012 created the legal basis for mortgages and enforcement. Since then, the government has combined Sakani and the Real Estate Development Fund with bank financing. Homeownership among Saudi households reached about 66% by the end of 2025, against a Vision 2030 target of 70%.
The two markets also differ in structure and maturity. Islamic financing in Malaysia is about 48% of total banking-system financing, in a long-established dual system. The Malaysian market has also evolved. Home financing moved from the early sale-based model (bay’ bithaman ajil) towards partnership-based structures such as diminishing musharakah, partly in response to legal and Shari’ah scrutiny. Saudi Arabia has moved the other way, in scale: banks can now finance up to 90% of a first home for Saudi nationals, and longer tenors are available. Saudi Arabia is still working through a softer patch, with new mortgage contracts down 21% in the first half of 2026 as affordability pressures bite.
For lessons, I see three that Saudi Arabia and other markets can take from Malaysia:
a) Shari’ah governance: a clear, central reference point gives certainty to banks, customers and courts.
b) Standardisation: consistent contracts and disclosure make products easier to compare and reduce disputes.
c) Product evolution: the shift to partnership-based structures shows that products can move closer to the spirit of risk-sharing while remaining workable.
Malaysia, in turn, can learn from Saudi Arabia’s scale and policy coordination. Saudi Arabia has linked housing finance, subsidy, land and supply in one national programme, with digital platforms that shorten the journey for families. Combining that kind of delivery with Malaysia’s legal clarity would be a strong model.
6. Musharakah Mutanaqisah and Default Management
You have written on “Managing Default in Musharakah Mutanaqisah.” What are the unique risks and challenges of this partnership-based financing model? How can Islamic banks better manage default while remaining Shari’ah-compliant?
Musharakah mutanaqisah (MM), or diminishing partnership, is one of the closest home-financing structures to the ideal of risk-sharing. That is also why it is harder to manage than a sale-based product. The bank is a co-owner of the property, so it carries market risk on the asset as well as credit risk on the customer. The customer’s ability to keep buying out the bank’s share becomes the central question. It also needs more from the institution than a simple sale: sound valuation, well-drafted documents, clear rental and pricing rules, and, in many jurisdictions, legal and regulatory frameworks that fit a co-ownership model.
Default is where this becomes most visible. In theory, if the customer cannot continue, the property is sold and the proceeds are shared according to each party’s ownership. Gains and losses fall on both sides. In practice, many banks add a purchase undertaking, which obliges the customer to buy the bank’s remaining share. The customer usually cannot pay, so the property is sold and the bank still recovers its outstanding amount. Whatever the sale price, the customer owes the shortfall. When I studied this in Malaysia, the outcome looked very similar to a conventional sale-based financing. The bank’s capital is effectively protected, and the partnership principle has little practical effect at the point where it matters most.
Banks did not take this route out of bad faith. Regulatory capital treatment, legal enforcement through existing property law, and the need to price risk consistently all pushed them towards the protected position.
Today, I would suggest the following to manage default while keeping to Shari’ah:
a) Keep the promises separate and unilateral. The customer’s promise to buy and the bank’s promise to sell should not be combined into a binding two-way agreement. The buyout should not be a condition of the partnership itself.
b) Price units at market value. Fair rent and fair unit prices reduce the incentive to guarantee the bank’s capital in disguise.
c) Prevent problems early. Careful affordability assessment, takaful cover, early contact with struggling customers and rescheduling can resolve most cases before any sale is needed.
d) Be transparent about default. Charges should compensate for actual loss, with any excess going to charity, and the treatment of shortfalls and surpluses should be explicit in the contract.
e) Make Shari’ah governance real. Boards and regulators should check that default practice matches the contract, not only the documentation at the start.
Regulators have moved on this. Bank Negara Malaysia’s Shari’ah Advisory Council resolved on MM in 2010 and the central bank issued specific policy documents. Academic reviews since then have still found gaps between those rules and bank practice, including in default handling and the wa’ad statement. The direction is right, but the real test of Islamic finance is whether the substance matches the form.
7. Simplifying Islamic Finance for Everyone
You founded “Islamic Finance for Everyone,” an online platform dedicated to simplifying Islamic economics, banking, finance, and capital markets. Why is this educational mission important to you? How do you make complex concepts accessible without diluting their substance?
When I started teaching and researching Islamic finance, I noticed a gap. The field has grown into a global industry, but most people still meet it through slogans: “interest-free banking,” “halal investing,” or, less kindly, “conventional finance with different labels.” Those slogans don’t help someone choosing a home financing product, deciding where to save, or trying to work out whether a product is genuinely Shari’ah-compliant. They also don’t help the many students and professionals who want to enter the field. I believe that people can only make good financial choices, and hold the industry accountable, if they understand the principles behind it. That is why I started Islamic Finance for Everyone, a platform that explains Islamic economics, banking, finance and capital markets in plain language for anyone with an interest in the subject.
There is also a personal reason. My path has taken me across several countries and many different audiences, from Bosnia and Malaysia to Saudi Arabia, and I have taught both specialists and complete beginners. Wherever I go, I find the same curiosity and the same need for a clear starting point. The knowledge exists, but it is often locked inside technical language, so I try to open it up.
Making a subject accessible without watering it down comes down to a few habits. The first is to start with the questions people actually have. Rather than begin with Arabic terminology, I ask how the bank makes its money, who carries the risk, and what the customer owns at the end. The second is to use concrete examples. A car purchase or a home financing case teaches the logic of murabahah, ijarah or diminishing partnership faster than any definition. Terms such as riba, gharar and maysir come in when they are needed, with a plain explanation and the reason they exist, rather than as a vocabulary list to memorise.
The most important habit is to keep the line between simple and simplistic. I simplify the language and the structure, but I don’t hide the debates. Scholars disagree on certain structures, and practice does not always match the ideal. Saying so is what keeps the content credible, and it invites the kind of scrutiny that improves the industry. An informed audience asks better questions of banks and regulators.
The goal is not to make everyone an expert. It is to give people enough understanding to ask good questions, whether they are customers, students or future practitioners.
8. The Journal of Economics, Law & Society (JELS)
You founded and serve as Editor-in-Chief of JELS, which focuses on Islamic economics, banking, and finance. What gap in academic publishing were you addressing? What do you hope the journal will contribute to the field?
When I started thinking about JELS, I kept coming back to a simple observation: Islamic economics and finance are rarely studied in isolation. A question about an Islamic financing product is also a question about contract law and regulation. A question about the Halal industry is also a question about consumers, trade and social welfare. Yet much of the academic publishing landscape separates these fields, so that work on Islamic finance sits in finance journals, legal analysis sits in law journals, and the social dimension is often lost between them. I wanted a place where these conversations could happen together. That is why the journal is called the Journal of Economics, Law and Society, and why it gives particular attention to Islamic economics, banking and finance.
A second gap concerns who gets published. Researchers in emerging and mid-sized markets, including the Balkans, the Gulf and Southeast Asia, often have strong local knowledge and original data, but they find it hard to reach international journals. A journal based in Bosnia and Herzegovina, with a rigorous review process and an international authorship, can offer a credible route for work that might otherwise stay local. It can also bring the perspective of smaller markets into a field that tends to be dominated by a few large ones.
This mission received an important endorsement recently, when the journal was accepted into the Scopus database. For a young journal, that is a significant milestone. It shows that the standards we set for peer review and quality are recognised internationally, and it gives our authors greater visibility and confidence that their work will reach the global research community. I am grateful to our authors, reviewers and editorial team, who made it possible.
What I hope the journal contributes is, first, rigour and relevance together. I would like it to publish work that meets high academic standards and also speaks to regulators, practitioners and policymakers who face real questions, from digital finance and regulation to the measurement of gharar. Second, I hope it helps younger scholars develop. Many early-career researchers need constructive feedback as much as a decision, and a journal can do that for them. Finally, I hope that over time JELS builds a body of work that shows Islamic economics and finance at their best: grounded in principles, tested against evidence, and honest about the distance between the ideal and the practice.
9. Islamic Finance and Economic Growth
Your research explores the impact of microfinance on economic growth in Bosnia and Herzegovina, and broader topics of financial development and market structure. What are the key findings of your research? How can Islamic finance be better leveraged for economic development in both Muslim and non-Muslim countries?
My research has followed one broad question: how do the structure and depth of a financial system relate to real economic outcomes? In Bosnia and Herzegovina, I looked at microfinance, which is often presented as a straightforward tool for growth and poverty reduction. I think the lesson is that microfinance is not automatically good or bad for growth. What matters is what the loans finance, whether they reach productive enterprises, and how the sector is regulated and supervised.
A second line of my work covers financial development and market structure, especially bank concentration and its relationship with growth and economic volatility in OIC countries and in dual-banking systems, where Islamic and conventional banks operate side by side. What I take from this work is that a bigger financial sector is not necessarily a better one. Its quality, competitiveness and diversity matter just as much as its size.
This brings me to how Islamic finance can be used better for economic development. Its principles point in the right direction: finance should be tied to real assets and real activity, risk should be shared rather than transferred entirely to the weaker party, and speculation and excessive debt should be avoided. Used properly, these principles suit small and medium-sized enterprises, housing, infrastructure and social finance. Partnership-based products, sukuk linked to real projects, and instruments such as zakat and waqf can all channel resources to people and sectors that conventional finance serves poorly.
The challenge is to ensure the practice aligns with the principles. In many markets, Islamic finance has leaned heavily on debt-like, sale-based structures, and I have written about the gap between form and substance in areas such as home financing. Closing that gap needs better regulation and Shari’ah governance, stronger human capital, and products designed for development needs rather than copied from conventional ones.
Islamic finance can also contribute in non-Muslim countries. Its ethical and asset-backed character appeals to investors and customers of many backgrounds, and several non-Muslim-majority countries have already built Islamic finance into their financial centres or issued sovereign sukuk. For these countries it offers a way to diversify funding and widen financial inclusion. For this to work, it must be presented for what it is: a framework for responsible, real-economy finance that happens to be rooted in Islamic values, which anyone can use.
10. Advice for Aspiring Islamic Finance Academics and Professionals
You hold a PhD from INCEIF and have taught at multiple universities. For someone aspiring to build a career that bridges academia and Islamic finance practice—perhaps as a professor, Shari’ah advisor, or consultant—what advice would you give? What skills and experiences should they prioritize?
My first piece of advice is to build real depth in two languages at once: the language of finance and the language of Shari’ah. Islamic finance sits where fiqh al-mu’amalat meets banking, markets, law and economics, and people who can only speak one of these languages quickly reach their limit. A finance specialist who cannot read a contract through its Shari’ah logic will miss what makes a product Islamic. A Shari’ah scholar who does not understand balance sheets, risk and regulation will struggle to see how a ruling plays out in practice. The people who make the biggest difference are those who can move between the two and explain each side to the other. If someone wants to serve as a Shari’ah advisor in the formal sense, I would add that they need serious training in Islamic jurisprudence, not only a finance degree, because the role carries real responsibility.
Second, I would encourage a rigorous research foundation. My own doctoral studies at INCEIF taught me to ask better questions, to test claims against evidence and to accept that an elegant idea may not survive the data. That habit is just as useful in a bank or a consultancy as in a classroom. A good publication record also opens doors, but I would stress quality over quantity, and topics that matter to the industry over topics that are merely easy to publish.
Third, get close to practice early. Academics who have never seen how a product is structured, approved, priced and audited tend to teach an idealised version of the industry. Internships, consulting projects, work with a Shari’ah board or a regulator, and research roles in industry institutions all give a different picture. In my experience, the gap between the textbook model and the market is where the most interesting research questions are found, and it makes classroom teaching far more credible.
Fourth, develop communication skills. A professor, advisor or consultant spends much of the day explaining complex issues to people with different backgrounds: students, bankers, regulators, customers. Being able to write clearly and speak simply without distorting the substance is one of the most valuable skills in this field, and it is rarely taught formally.
Finally, I would advise patience and integrity. This is a field where credibility is built slowly and can be lost quickly. Be honest about what you know, and be willing to say when practice falls short of principle. Work across borders if you can, because markets such as Malaysia, the Gulf, Turkey and the Balkans each teach something different. Keep learning, stay humble, and treat both the academy and the industry as places where you have something to give and something to learn.