Definition of Finance

Not a perfect but perhaps as good as any definition of finance:

‘Finance is the acquisition, allocation and management of assets, including the obtaining, disposition, utilization, payment and repayment of moneys. The finance element is present in, and utilized by participants in, each of the other categories of activities. Investment is using money to make more money, usually, in a finance context, by acquiring an interest in an asset to achieve income or ultimate appreciation in asset value or, in an economic context, saving and deferring consumption. Investment activities include the acquisition of interests in equities, debts, other securities, tangible and intangible assets, and an infinite range of other assets. Banking (excluding investment and merchant banking) is comprised of activities such as receiving money on current and deposit accounts, acting as payment agent by maintaining checking and or/current accounts for customers, paying checks drawn on the bank, collecting checks deposited to accounts, enabling customer payments, and advancing money to customers, among other functions. Insurance is the equitable transfer of risk of a contingent and uncertain loss from one person or entity to another in exchange for a payment or contribution. The contribution or payment, or fee, is usually dependent upon the frequency and severity of the loss event and is pooled, in some manner, with payments and contributions from other insureds.’

Michael JT McMillen, Islamic Finance and the Shari‘ah (Riverstone Publishing Group 2013), pages 21-22