Islamic mortgage boom

Submitted by Anonymous (not verified) on Thu, 08/22/2019 - 16:08
Year
2004
Country
United Kingdom
Language
English
Abstract

Many Muslims in the UK do not conduct banking with conventional insitutions, yet remain an untapped market for Islamic financial products. The two most common Islamic financial structures are murabaha (cost-plus finance) and ijara (leasing). Due to its high cost, murabaha has been limited mostly to commercial transactions. Risk-weighting is incorporated into evaluating European capital transactions, with the standard being that 8% of money loaned need be retained for liquidity purposes (a 100% risk weighting). While murabaha receives a 50% risk weighting, ijara receives a 100% risk, elevating the cost of ijara mortgages significantly. As of 2003, Stamp duty relief programs for murabaha and ijara transactions have been establshed.

English
ISSN/ISBN
0955-095X
No. of Pages
pp. 15-17
Volume
No. 139 (June/July)
Select type of work
Name of the Journal
Author(s)
CIS Program Old
CIS publications
No
CIS Thesis
No