How Islamic Financing Helps InfrastructureMarch 6, 2019 at 2:37 pm
We are lucky here in North America. If you work hard, most of us can get an ijara mortgage or some other type of Islamic financing to better our lives. That’s not the case in every country. In may places, people struggle and don’t always have the benefits of a good life like we do.
Recently, a blog from The World Bank detailed how Islamic financing like the type we promote helps to boost infrastructure development and we thought we’d share the highlights here.
The article wastes no time and pulls no punches in describing how in many developing countries there are infrastructure gaps that the social contracts found in Islamic financing helps to cover. One of the biggest examples is in power generation. The article states that it is one fifth of what it is in more advanced places.
The concept of halal that is found in many different types of Islamic financing generally and Ijara mortgages specifically is important. The system and practices are built on certain principles risk sharing rather than just the pursuit of profits. There’s a high degree of transparency that needs to be followed and all projects that are built are monitored much more carefully. This in turn makes infrastructure projects much more efficient and effective.
This type of Islamic financing business transaction is catching on. There are countries in the Middle East presently where this type of sharia compliant financial product accounts for over 50% of all financial assets. Still, the article goes on to say there is a lot of room for improvement. For example, larger economies in areas like Turkey and Indonesia have an ijara mortgage rate that’s below 20%.
The research also goes on to say that there is a lot of room for diversification when it comes to Islamic financing. Presently, most of the assets in this area are in the banking sectors across the Middle East. Perhaps what’s most interesting is there’s a rising demand in different countries where this type of financing doesn’t necessarily spring from a religious conviction.
The proof is in the pudding as they say. Islamic bonds have been issued in Hong Kong, Luxembourg, South Africa and the United Kingdom.
There’s some other news that matters to Muslims looking for an Ijara mortgage or some other kind of Islamic financing. A recent Symposium on Islamic Infrastructure Finance sought to bridge the gap between public and private partnerships. One of the interesting things here is that there is a growing investor demand for these types of products to the point where large pools of assets and liquidity are said to be channeled into Islamic financing and other products.
What It All Means
What all this means to the average person who’s looking to get an ijara mortgage is simple. Islamic financing is geared towards social justice and helping everyone. Why not take a look at the options we have to help you get the right Ijara mortgage today?