Strategies to Shape the Future of Islamic Financial risk Management and Takaful Insurance

Abstract

This paper highlights the contemporary issues related to credit risk in Islamic banking and Takaful (insurance). These two areas of the Islamic finance are facing several challenges that need to be highlighted. Both are witnessing a global and regional increase in demand and have bright future. In order to secure proper growth, it is essential to adopt proper strategies regarding credit risk management and to expand insurance policies. Conventional finance has been solid competition for these Islamic finance products. Several topics were discussed such as; Islamic credit concept, types, factors, and tools. On the other hand, the Islamic insurance concept, mechanism, challenges, and modern thoughts and strategies are considered. The major conclusion is that religious legislation pertaining to the framework of the Islamic financial institutions will play a critical role in shaping the future of credit and insurance management strategies.