96 AN INTRODUCTION TO ISLAMIC FINANCE
During the period referred to as “the age of the commercial revolution”
(Lopez 1976), trade fl owed freely across the known world, supported by
the risk - sharing methods of fi nance developed in the Muslim countries con-
sistent with the Shari’ah. Information regarding the basic features of these
methods spread through Europe, Egypt, India, and North Africa. These new
fi nancial techniques were also transmitted by Muslim merchants to Eurasia,
Russia and China, as well as to East Asia.^7
Among these were the commenda and maona — two popular fi nancing
instruments in the Europe of the Middle Ages — which were undoubtedly
based on the musharakah and mudarabah from the Islamic world.^8 These
institutions, along with fi nancial instruments such as hawala and suftaja,
were transmitted to Europe and to other regions by Jewish scholars and
merchants throughout the Jewish Diaspora and via Spain through trade
and scholastic borrowing from Islamic sources.
Thanks to the latest research conducted on the Geniza archives in Cairo,
our understanding of historical Biblical writings and translations, ancient
Jewish liturgies, communal records and relations between Jews and Arabs
in medieval Islamic society has increased enormously.^9
From these records and Islamic fi qh sources, it is clear that there is what
has been called a “remarkable symmetry between the legal formulations
of the late - eighth century and the documented commercial practices of the
eleventh and twelfth century Geniza merchants.”^10
The Geniza records provide little evidence of lending money for inter-
est, which was shunned religiously and of limited signifi cance economi-
cally. However, trade in the Middle Ages was both extensive and intensive,
fi nanced by risk - sharing partnerships in industrial, commercial and public
administration projects.
The practice of mudarabah is well - documented in the westward trade
between Egypt and Tunisia. The same sources make it clear, too, that mush-
arakah partnerships were being practiced in the north–south trade between
Egypt and Syria as well as between Egypt and Jeddah during the eleventh
century.^11
Similarly, 32 mudarabah contracts from the seventeenth century were
discovered in the Turkish city of Bursa and were clearly the most important
type of business partnership being practiced there at that time. Interestingly,
these partnerships were, for all practical purposes, identical with the classi-
cal ones observed in the Geniza archives. Lively trade exchanges also took
place between the Arabian Peninsula and India. Goitein, for instance, has
found 315 documents in the Geniza archives dealing specifi cally with trade
in the Indian Ocean. Islamic partnerships were observed even further East,
in Indonesia, at the other end of the Indian Ocean.^12
Before the beginning of the twentieth century, most economic historians
of the Middle Ages ignored the importance of trade and fi nancial relations
between Europe and the rest of the world, which were crucial to the eco-
nomic development of the West before the fi fteenth century. Abu - Lughod
(1994) contends that this was the result of the belief among Eurocentric