Common Principles of Impact Investing and Islamic Finance

Although a difference between impact investing and Islamic finance exists with regards to their core markets, there is a convergence between the two mechanisms. Islamic finance and impact investing are value-based investments with a moral motive, and both aim to create positive non-financial value alongside financial returns. They share a broader understanding of the relationship between business and society, which is centered on advancing human well-being; and have provided access to finance for segments of the population that are directly or indirectly kept out of the formal financial sectors. Several Islamic finance tools and products are compatible with impact investing which are already in use globally.