I want to tell you about a conversation I had with a friend — a software engineer in his early thirties, practicing Muslim, someone who prays five times a day, fasts Ramadan, gives zakat. A genuinely thoughtful person. He asked me: "Is it even possible to invest properly as a Muslim? Every time I look into it, I either end up confused by the scholarship or I get sold something." That question has stayed with me, because it captures something real about the state of halal investing that the industry rarely admits: we have built a sophisticated intellectual edifice that leaves ordinary Muslims at the door.
Islamic finance as a discipline is extraordinary. The jurisprudence around commercial transactions — from the classical fiqh al-muamalat of Ibn Qudama and al-Kasani to the modern fatwas of contemporary Shariah boards — represents centuries of careful reasoning about how economic life should be organized in accordance with divine guidance. The prohibition of riba is not merely a rule against charging interest; it is a statement about the nature of money, risk, and justice. Musharakah and mudarabah are not merely alternatives to debt; they are philosophies of partnership that fundamentally rebalance who bears the cost of failure. This tradition is rich, nuanced, and worth taking seriously.
And yet: the average Muslim investor sitting at their laptop in Birmingham, Nairobi, or Toronto is profoundly underserved by it. This is the gap I want to examine — not as an academic exercise, but because the cost is real: billions in Muslim wealth either sitting idle in cash accounts or flowing into conventional investments that violate the beliefs of the very people making them.
How We Got Here: The Institutional Capture of Islamic Finance
The modern Islamic finance industry was largely built by and for institutions. When the first Islamic banks emerged in Egypt and the Gulf in the 1960s and 70s, they were responding to a specific need: how do sovereign wealth funds, development banks, and high-net-worth investors operate within Islamic principles? The answer produced a remarkable set of instruments — sukuk, ijara, murabaha financing structures — that allowed large-scale capital deployment to proceed in a Shariah-compliant manner.
This was a genuine achievement. But it also meant that the intellectual and product development energy of Islamic finance has always been oriented upward — toward billion-dollar bond issuances, toward sovereign infrastructure financing, toward the wealth management needs of Gulf families with nine-figure portfolios. The retail Muslim investor, saving $500 a month from a nursing salary or a teaching salary, was largely an afterthought.
The products that did trickle down to retail investors were often pale imitations: Islamic savings accounts that paid "profit rates" mechanically pegged to LIBOR (raising the very questions about riba they were designed to avoid), or packaged funds with expense ratios that would embarrass a hedge fund manager. The message, implicit but unmistakable, was: Islamic finance is for people who can afford it.
The Shariah Screening Problem
When fintech platforms began democratizing shariah compliant investing in the 2010s, something genuinely exciting happened: for the first time, a Muslim with a modest income could access a curated portfolio of screened equities without needing a relationship manager at an Islamic private bank. Apps like Wahed Invest, Zoya, and others created genuine access where none had existed before. This matters. I don't want to minimize it.
But the screening methodology these platforms inherited — and the methodology still used by most Shariah boards — carries assumptions that deserve scrutiny. The standard financial screening thresholds (revenue from haram activities below 5%, debt-to-assets below 33%, etc.) were developed by the Dow Jones Islamic Market Index in the 1990s. They were designed for an era when conglomerates were the dominant corporate structure, when it was relatively easy to carve out "haram" revenue from a diversified company's income statement.
Today, those thresholds look increasingly strained. What is the "haram revenue" of a cloud computing platform that hosts gambling sites among millions of customers? What are the appropriate debt thresholds for a technology company whose balance sheet looks nothing like a 1990s manufacturer? Scholars are working on these questions — the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) has been revising standards, and thoughtful Shariah boards at institutions like Amundi and Saturna Capital have developed more nuanced approaches. But the retail-facing platforms often present their screening as if it were settled science, when in reality it is an ongoing ijtihad — a good-faith interpretive effort — with legitimate scholarly disagreement at every margin.
This opacity is a problem. Not because platforms are being dishonest, but because it cultivates a passive relationship between Muslim investors and their own beliefs. The investor is told: "This portfolio is halal." The investor accepts it and moves on. The rich tradition of Islamic commercial jurisprudence — which has always assumed that believers engage with it, not just consume its outputs — is reduced to a certification label.
The Deeper Failure: A Mismatch of Language and Life
There is a subtler problem beneath the institutional and methodological ones, and it is the one I find most troubling. The language of Islamic finance has bifurcated. On one side, there is the language of the academies and Shariah boards: precise, technical, rooted in classical Arabic jurisprudence. On the other side, there is the language of the halal investing platforms: simplified, reassuring, optimized for app store ratings. Neither is speaking the language of a practicing Muslim trying to make a real financial decision in a real life.
Consider the question of purification — the practice of donating a small percentage of dividends that may include impermissible income to charity. This is a genuine mechanism that scholars have developed to allow participation in the broader market while maintaining integrity. But ask the average user of a halal investing app whether they understand how purification works, what the calculation is, or whether they need to track it themselves — and you will find deep confusion. The concept has been either over-simplified into "we handle it for you" or omitted entirely.
Or consider the question of intention — niyyah. One of the principles of Islamic jurisprudence is that intention matters. Two investors can hold the same stock for different reasons, with different moral weights attached to those reasons. This is not a fringe position; it is woven into the fabric of fiqh. But it has no place in a drag-and-drop portfolio builder. The richness of the tradition cannot be expressed in a user interface, and so it is quietly discarded.
What is left, after these simplifications, is something that looks like halal investing but feels like a branded product. That is not necessarily the fault of the platforms — they are operating under real commercial constraints, serving users who want simplicity. But it represents a genuine loss, and the community should name it.
What the Fix Actually Looks Like
I am not arguing that Muslim investors should become amateur fuqaha before they can open a brokerage account. That would be its own kind of failure — a paralysis dressed up as piety. The question is not whether to simplify, but how to simplify honestly, and what responsibilities each party in this system should bear.
For platforms and institutions: transparency about methodology is not optional. If your screening uses a 5% revenue threshold, say so, explain why, and acknowledge where scholars disagree. If your purification calculation uses a particular methodology, make it legible. Treat your users as adults who are capable of understanding nuance if it is presented clearly. The Muslim investor who feels genuinely informed about what their money is doing is not a compliance liability — they are your most loyal customer.
For scholars and educators: the work of making Islamic commercial jurisprudence accessible to the contemporary Muslim investor is urgent and underserved. Not accessible in the sense of dumbed-down, but accessible in the sense of translated into real scenarios. A young Muslim asking whether their employer's 401(k) match is permissible, or whether they can participate in their company's stock option plan, deserves an answer that engages with their actual situation — not a fatwa template written for a different century's problems. The scholars who are doing this work deserve far more recognition than they typically receive.
For Muslim investors themselves: the tradition expects engagement, not passivity. The concept of ijtihad — independent jurisprudential reasoning — is not reserved for scholars alone; it is a responsibility distributed across the community. You will not become a mujtahid by reading a few blog posts. But you can, and should, develop enough familiarity with the principles of Islamic commercial ethics to ask good questions of the platforms and advisors who serve you. What exactly does "halal" mean in this context? Who decided, and on what basis? Are there scholars who disagree, and why?
These are not hostile questions. They are the questions that a living tradition requires its participants to ask.
A Different Measure of Success
My friend the software engineer eventually did start investing. He found a platform he felt comfortable with, did his own research, made his own decisions. He is not perfectly certain that everything in his portfolio is free of any question — he told me as much, with the quiet honesty that I have come to associate with people who think carefully about their faith. "I'm doing my best," he said, "and I'm making dua that Allah accepts it."
That, I think, is closer to the spirit of Islamic commercial ethics than either the false certainty of a certification label or the paralysis of an investor who never starts because perfection is unavailable. The tradition has always understood that human beings operate under uncertainty, with incomplete information, in a world that does not cooperate with our categories. The response to that condition is not inaction. It is tawakkul — trust in Allah — paired with the best effort we can make.
What the halal investing space owes Muslim investors is not a perfect product. It owes them honesty about what the product is, clarity about the reasoning behind it, and the tools to engage with that reasoning as full moral agents — not just consumers of a certification. That gap, between what the industry currently provides and what the tradition actually demands, is the work still to be done.
This article was originally published on ZakatInvest.com, a resource dedicated to helping Muslim investors navigate shariah compliant investing with clarity and integrity.