Economic Benefits of Risk Sharing


  • Abdul Karim Abdullah International Institute of Advanced Islamic Studies (IAIS) Malaysia



Discussions of the benefits of risk sharing tend to be confined to benefits at the company level. These include remaining debt-free and the fact that capital, unlike borrowed funds - apart from listing, legal and other fees - comes at zero cost. What tends to be overlooked is that the use of risk sharing also brings major benefits to society at the macro-economic level. Specifically, it contributes to the realisation of the leading economic objectives of government stabilisation policies. These include an efficient allocation of resources, full employment, stable prices, robust growth, a more even distribution of wealth, and greater cyclical stability. Thus, channeling capital into investment by means of risk sharing in preference to borrowing at interest can significantly alleviate the macro-economic problems currently plaguing most industrialised economies.


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How to Cite

Abdullah, Abdul Karim. 2014. “Economic Benefits of Risk Sharing”. ICR Journal 5 (4):514-28.