Tuesday, February 12, 2008

Islamic Banking

After that last few days of subzero temperatures here in Michigan I have started considering the option of ..... YES, a car. I came across this Reuters story as I was researching interest free loan options in the US. Sharia law (islamic religious law) has a set of principles dealing with how muslims should conduct their daily transactions. Especially interest or charing a fee for the use of someone's money is prohibited. Muslim banks also don't invest in businesses that sell haram products or services. 
I was totally shocked to see how many islamic banking institutions are available to US citizens. For auto loans they have a Lease-to-Purchase model. Instead of interest on the principal borrowed amount they just charge a set fee for the loan. I have a lot more research to do but this is such a great facility.

VIA Wikipedia & Reuters


Anonymous said...

You link to Lariba for financing-- I know of no scholars that have approved of its products. Supposedly it uses conventional loan documents with a cover letter saying "trust us, this is really OK." Be an informed consumer before you use a Lariba product.

Khalid said...

Thank you so much for your comment. I am just touching the surface of literature about riba free banking.
Please let me know of some good muslim banks.