Islamic finance is a structure question before it is a pricing question

A common way to evaluate an Islamic finance product is to convert its return into an implied interest rate and compare that with a conventional alternative. It produces a number, and the number is usually close. It also discards most of the information.

The substantive differences sit in structure: who holds title to the asset and when, how risk is allocated between the parties, what happens on early settlement, and what recourse exists on default. Those terms determine outcomes in exactly the situations where the comparison matters.

The Gulf is among the deepest markets in the world for these instruments, which means genuine choice — and genuine variation between institutions that a rate comparison will not reveal.

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