At one level it is now well established that IF is quite different from conventional finance simply because former is based on Quranic and Shariah injunctions and principles. Islam prohibits exploitative transactions such as (riba), or transactions involving uncertainty (gharar) or speculative behavior (maisir) or trading of debts. In conjunction, IF advocates “material finality” that underscores backing of financial transaction with real economic activity/transactions.
The combination of these prohibitions and IF’s emphasis on backing transaction with real economic activity are the two key ideological differences IF has with the conventional finance. Also, IF encourages financial relationship between financiers and entrepreneurs (borrowers) where lender and borrowers share investment risks in businesses and assets.