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    9 views8 pages

    0009 - Islamic Housing Finance PDF

    Uploaded by

    shahxad903

    Copyright:

    © All Rights Reserved
    Download as PDF or read online from Scribd
    Flag for inappropriate content
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    ISLAMIC HOUSING FINANCE Islamic Housing Finance INTRODUCTION In most socotios today, there is a tinction bbetween the legal code and the moral code of the major religion in that society. Despite this, many individuals choose to order their personal and busines relationships accoré- ing to their roligin’s rational moral code. For example, there is nothing nthe cv aw cof most countries restricting the consump tion of most foods, yet many people folow lotay restrictions sot by religions such as. Hinduism, Islam, Judaism, and, unt oie tively recent, Catholicism, ‘Among some Muslims, there is @ sitar abhoronce for certain Kinds of financial con- tracts which are otherwise both legal and ‘common among many people, Musim and ‘or-Musim. Broadly speaking, these con- tracts imolve the payment of a specif {elum or intrest forthe benefit ofthe use of ‘other people's money. Fo these person, an |ssvo arisos whenever the consider borrow- ing funds for housing That issue is how best, to arrange the transaction to avoid violating key moral principles percelved by them to appl ‘Such arrangements are generally krown a Islamic housing fnanco. The focus of tis atic ison the ways that Islamic tance Is Dauglas Diamond is an independent corer by Douglas Diamond practiced curenty, tincudes a discussion of basic concepts of siamic finance, a descrip- tion of Islamic financial products generally avalable and their applicability to housing finance, and some case stucies of Islamic ‘housing finance in Jordan, the United King- dom and the United States. BASICS OF ISLAMIC FINANCE “Thoreare two basic Quranic concepts shap- ing modern Islamic france: expt prohibi- tions by God against nba and maiz What are these things that are protibited? The ‘Quan, the divine word of God, does nat ‘explain in det Thisstuation has resulted in ‘wide range of intorpretations by Islamic scholars, some liberal enough to encompass most conventional forms of racial transac ‘ions? However, the buk of the tadtional Interpretation ofthe Quran and the associ- ‘ated Suna (the authenticated accounts of ‘the Prophets actives and words) are rela- tivly restrictive in ways that wil be briely «dscussed below. In addition to thesa basic prohibitions, Istamic finance is guided by a huge, subtle and fy controversial (here are a ast four main schools of thought) body of intrpreta- ‘ions of Quran and Sunna presrigtons for al forms of contractual and commercial ela: tionships. The sel-imposed limitations of Istamic finance can ony bo fully understood wii the context ofthe totaly of classical Islamic law, not ust the prohbitons on riba and mays. ‘Tho simpost translation of nba is "usury ‘The concept of usuy has a long and com- plex history in most forms ofboth cil and robgious law in Judeo-Christian sockets, 50 its not suprising that tis unclear i Islamic law as wel. However, the unequivocal con-

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