This paper aims to formulate a conceptual framework that will facilitate the actualization of maqāṣid al-Sharīʿah in product design and consumption within Islamic financial institutions (IFIs).
This paper relies on the classical and contemporary literature on maqāṣid al-Sharīʿah and Islamic finance and adopts a qualitative content analysis method and an inductive approach to outline the constituent elements that formulate the framework.
This study determines six vital constituents of maqāṣid al-Sharīʿah, namely, parameters of maqāṣid, particular objectives, appropriate means, micro provisions, level of need and legal maxims to develop a conceptual framework of actualizing maqāṣid al-Sharīʿah in Islamic finance. The framework covers the following three stages: identification of maqāṣid, operationalization of maqāṣid in product design and consumption based on maqāṣid.
This paper proposes a conceptual framework without investigating the practice of any particular industry or products. Further research would focus on formulating a practical framework based on a focus group discussion with industry experts, elaborating the parameters of maqāṣid, scrutinizing the maqāṣid available in the literature by the parameters of maqāṣid and assessing the IFIs’ products and services using the proposed framework.
This paper provides insights into the importance of maqāṣid elements and the effects of overlooking them on IFIs and customers’ product consumption. Furthermore, a major implication of the proposed framework is to learn how to use the maqāṣid approach as the baseline for designing new financial products.
The novelty of this paper lies in its pioneering attempt of harmonizing all essential maqāṣid elements and using them as constituents to formulate a comprehensive framework that actualizes maqāṣid al-Sharīʿah in the Islamic finance industry.
