INSTALLMENT SALE AS AN INSTITUTION OF INTERTIME EXCHANGE IN ISLAMIC ECONOMICS: PRICING, RISK DISTRIBUTION AND SECURITY MECHANISMS

Abstract

The article analyzes the economic nature of installment sales as an alternative mechanism for intertemporal resource allocation under conditions where interest‑based lending is prohibited. The aim of the study is to conduct a systematic analysis of the economic mechanisms of installment sales as an institution of intertemporal exchange in an Islamic economy under conditions where interest‑based lending is prohibited. The methodological framework is based on a comparative legal analysis of the norms of Islamic commercial law, institutional economic analysis, and empirical data from a pilot project of partnership banking in the Russian Federation. The pricing structure under payment deferral is examined, and the mechanisms for debt collateralization are compared. It has been shown that the practice of “compensating for actual damage” is economically equivalent to an interest rate and gives rise to the problem of moral hazard. An alternative mechanism based on a charitable obligation has been proposed, which ensures the stimulation of timely payment without generating interest income for the lender. The results of the study are of importance for the development of the regulatory framework for partnership banking and for improving the efficiency of Islamic finance institutions.