Mariam Elbanna, Muhammad Wael Chafoory, Sondos Jehad Shnewra

Cairo's Halal Restaurant Industry: Exploring Sharia-Based Financing and Fatwa Influence

Introduction

Cairo's halal restaurant industry: exploring sharia-based financing and fatwa influence. Explore Sharia-compliant financing in Cairo's halal restaurants, analyzing mudharabah contracts & Egyptian scholars' fatwas for microeconomic justice & transparency.

Abstract

Objective: This study aims to analyze the level of Sharia compliance in the financing practices of mudharabah contracts based on the fatwas of the Council of Egyptian Scholars, using the case study of a Sharia Restaurant in Egypt. This research is motivated by the importance of implementing Sharia principles in financial transactions, particularly in the microeconomic sector, to align with the values of justice and transparency as taught in Islam. Theoretical framework: The theoretical framework of this study refers to the concept of Sharia compliance and the fundamental principles of fiqh muamalat, particularly in syirkah and mudharabah contracts, as well as contemporary perspectives on fatwas as a source of Islamic economic law. Literature review: The literature review includes previous studies on the implementation of mudharabah contracts in the microeconomic sector and emphasizes the importance of supervision by local scholars in economic practices. Methods: This study employs a qualitative approach using in-depth interviews, participatory observation, and documentation to thoroughly explore the financing practices implemented. Results: The findings reveal that the Sharia Restaurant in Egypt has implemented mudharabah contracts by the fatwas of the Egyptian Scholars Council, through profit-sharing mechanisms based on pre-agreed ratios (nisbah), transparent fund management, and active involvement of business partners in decision-making processes. These practices reflect the principles of justice, shared responsibility, and the avoidance of gharar (uncertainty) and riba (usury). Implications: The implications of this study highlight that adherence to local fatwas can serve as a strategic guide for strengthening Sharia-based microeconomics. For Islamic financial institutions and micro-entrepreneurs, this study offers insight and inspiration for implementing Sharia-compliant partnership-based contracts. Novelty: The novelty of this research lies in its focus on the local Egyptian context, which is rarely explored in the Sharia compliance literature, as well as its analytical approach to the implementation of local scholars’ fatwas in microeconomic practices.

Review

This study, "Cairo's Halal Restaurant Industry: Exploring Sharia-Based Financing and Fatwa Influence," presents a timely and relevant investigation into the practical application of Sharia principles within the microeconomic sector. While the title suggests a broader industry scope, the abstract clarifies a focused case study analysis of a Sharia Restaurant in Egypt. This specific focus on the local Egyptian context, analyzing Sharia compliance in *mudharabah* contracts based on the fatwas of the Council of Egyptian Scholars, addresses a notable gap in the existing Sharia compliance literature. The research's clear objective of aligning financial transactions with Islamic values of justice and transparency, alongside a robust theoretical framework grounded in *fiqh muamalat* and contemporary fatwa perspectives, establishes a strong and pertinent foundation for the inquiry. The methodology employed in this research is well-suited to its qualitative objectives. Utilizing in-depth interviews, participatory observation, and documentation, the study thoroughly explores the financing practices of the selected Sharia Restaurant. The findings convincingly demonstrate that *mudharabah* contracts are implemented in accordance with local fatwas, evidenced by profit-sharing mechanisms based on pre-agreed ratios (*nisbah*), transparent fund management, and active involvement of business partners. These practices effectively reflect core Islamic principles such as justice, shared responsibility, and the active avoidance of *gharar* (uncertainty) and *riba* (usury). The study's implications are significant, offering valuable insights for Islamic financial institutions and micro-entrepreneurs on strengthening Sharia-based microeconomics through adherence to local scholarly guidance. Despite its strengths in providing deep qualitative insight, the study's reliance on a single case study inherently limits the generalizability of its findings across the broader Egyptian halal restaurant industry. Future research could expand upon this foundation by incorporating multiple case studies, comparative analyses across different regions, or even a quantitative survey to assess the prevalence of such practices. Nevertheless, the research makes a valuable contribution by providing empirical evidence of Sharia compliance in a local microeconomic setting and highlighting the practical role of local fatwas. It offers a solid starting point for understanding how Islamic ethical finance principles are concretely applied, making it a significant addition to the field of Islamic economics.

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