Manifestation of Sharia-based credit in its realization fulfilling needs using a credit system

Abstract

Sharia credit is the provision of money based on a loan agreement or agreement between the lender and the recipient. The recipient must return the money within the agreed timeframe in exchange for profit sharing. This article aims to analyze and explain the description of Sharia credit, distinguish Sharia credit from conventional credit, and the effectiveness of Sharia credit in Indonesia. Sharia credit is a product of Sharia-based financial institutions in which all transactions are exempt from laws violating religion's provisions. The most fundamental difference between Islamic credit and conventional credit is in the remuneration system. Established credit uses interest rates, while Islamic credit uses a profit-sharing system based on an agreement. The results of writing this article show that Sharia credit is more down-to-earth than conventional credit with all the advantages possessed by Sharia credit. It does not apply an exciting system but implements a profit-sharing or <em>mudharabah</em> system. Through the profit-sharing system, Islamic credit is hoped to improve the economy by providing financing to those in need without violating Islamic religious rules.