Good prospects for Islamic leasing in CanadaApril 22, 2020 at 3:10 pm
According to the most recent 2016 census, Canada has 37 million inhabitants out of which over one million are Muslims. Due to the demand by Canadian Muslims for Shariah compliant products including Islamic leasing, the government is making inroads in this area. In early 2017, an Islamic leasing auto finance company, Amana Auto Finance Canada (AAFC), was launched in Canada.
After home financing, Islamic leasing products in the automotive financing
sector are the most in demand.
AAFC is headed by Peter R Andrews, the auto finance executive with 40 years of experience in the automotive industry including 35 years with General Motors, with short stints as a consumer credit operations director at Ally Credit Canada and RBC Automotive Finance.
Other than that, Toronto-based robo advisor Wealth simple Financial bought a Shariah compliant portfolio while Manzil, which offers Halal financing and other investment options including mortgages, recently partnered with the Islamic Finance Advisory and Assurance Services.
Although there is a lack of facilities for Islamic leasing in Shariah compliant
mortgages in Canada presently, there is however a potential for more than US$2 billion in Shariah compliant mortgage products.
For example, the G20 took the initiative to explore Islamic leasing as a method of infrastructure investment, but the need for more of these mortgage types is evident considering the fact that the number of Shariah compliant mortgages in Canada should rise to US$18 billion this year.
There is every indication that Islamic leasing will continue to emerge as a big contributor in the investing sector. This is due to the fact that Canadians by and large are looking for responsible and ethical ways to handle financial matters.