What You Need to Know About Islamic Financing and Risk Management   

Islamic financing is about risk management. Ijara Community Development Corp. offers several different financing alternatives . Purchasing a home using  our riba-free ijara system has several benefits.

  • You get to keep your equity .
  • You’ll be able to own a home and renovate or decorate.
  • Buying real estate guarantees your family’s financial future.

We deal with risk management. The system we use is sharia-compliant. It promotes humanity and global prosperity.

Risk management is important to Islamic financing.   Devout Muslims find traditional mortgages difficult. Unequally shared risk and interest are problems.

The  Ijara-wa-Iqtina (lease and ownership) process tackles these issues. This is a rent-to-own agreement. The person who lives in the house is abiding by sharia-compliant principles.

How This Kind of Islamic Financing Works

First off, a trust is established. The client supplies a down payment. This amount is the first rental payment. That’s how the process avoids risk and riba.

An Ijara loan allows clients to save their money and take over ownership of the property from the trust.

Socially Responsible

This isn’t the only type of sharia compliant financing keeping pace with socially responsible rent-to-own models. #DECOM is about Decentralized Common Sense. It’s part of a new product called Ethical Ijara. This is  a new way to purchase real estate on the blockchain.

Digital Tokens

There are two different digital tokens in this crypto-backed tool. It’s a sharia-compliant way to get involved using cryptocurrencies. These are backed by the strongest asset class — real estate in North America.

Learn more about Ethical Ijara here.

Looking at using cryptocurrencies or a trust for Islamic financing?  It’s always good to identify risks.

There are some fundamental differences between an Ijara transaction and other more traditional conventional leasing models.

Promise to Purchase

First is the promise to purchase. A customer can purchase without obligation. There are several different types of purchasing agreements available. They all dictate how much the purchase price will be.

Buying a property and staying sharia-compliant needs guidelines. Islamic mortgages differ from traditional products.

Here’s an example. If you describe an Islamic finance’s profits as a percentage, it is acceptable and sharia-compliant.

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