Shocking I say.
It is a Shariah-compliant investment firm that prohibits borrowers and lenders from taking out interest-bearing loans. Such loans are considered exploitative for both borrowers and lenders under Islamic laws. Ibrahim worked with Devon Bank six years ago to set up its Shariah financing programs that allow borrowers to purchase shares in home mortgages and other types of loans
Anyone have an understanding of Shariah financing?
If Islam does not allow interest how can they include the interest in the payment plan?
Most important, does the IRS understand?
It would be a bad thing for Muslims seeking Sharia to be deprived from its benefits.
We must protect our friends from the ROP. /s
Its a shame.
Islamic financing merely means that interest is not to be paid. Hence, they purchase TBill and other securities at a discount. Yes, that is imputed interest, but apparently Muhhamed didn’t understand the corruption of his own followers.
Leases are big in Islam - no interest. Leases are faux interest.
If the Islamic organization can claim a religious purpose, then none of this matters. Even if they are terrorist, they claim religion.
Who's going to tell them no?
_______________How does Islamic finance work?___________.
The overarching principle of Islamic finance is that all forms of interest are forbidden.
The Islamic financial model works on the basis of risk sharing.
The customer and the bank share the risk of any investment on agreed terms, and divide any profits between them.
The main categories within Islamic finance are: Ijara, Ijara-wa-iqtina, Mudaraba, Murabaha and Musharaka.
Ijara is a leasing agreement whereby the bank buys an item for a customer and then leases it back over a specific period.
Ijara-wa-Iqtina is a similar arrangement, except that the customer is able to buy the item at the end of the contract.
Mudaraba offers specialist investment by a financial expert in which the bank and the customer shares any profits.
Customers risks losing their money if the investment is unsuccessful, although the bank will not charge a handling fee unless it turns a profit.
Murabaha is a form of credit which enables customers to make a purchase without having to take out an interest bearing loan. The bank buys an item and then sells it on to the customer on a deferred basis.
Musharaka is a investment partnership in which profit sharing terms are agreed in advance, and losses are pegged to the amount invested.