Islamic house financing:current models and a proposal from social perspective
AbstractShelter is one of the basic needs for human beings. Its availability for the people is an Islamic imperative. In view of the appalling living conditions for a substantial proportion of population in most countries around the world, especially Muslim, Islamic banks have entered the field with varying schemes for house financing. In this infant industry, the effort is understandably guided by profit motive but a social dimension has to surface in course of time. Unfortunately, the models banks currently use for house financing remains under the juridical gaze, more so as the practice is not always found transparent. This paper looks at Islamic house financing models in a broader societal context. It evaluates the efficacy of the in practice financing structures and suggests a new approach. The proposed model is shown as superior to the existing ones. It meets the norms of equity, fair play and openness and does not presumably violate any other Islamic norm. Finally, the paper makes some policy suggestions to integrate Islamic house financing with broader social goals of an Islamic economy.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 27919.
Date of creation: 04 Jan 2011
Date of revision:
Key words: Housing problem; basic needs; Conventional model; BBA in housing; the MMP model; Diminishing balances model; Constructive ownership; National planning;
Other versions of this item:
- Hasan, Zubair, 2010. ""Islamic house financing:current models and a proposal from social perspective," MPRA Paper 31638, University Library of Munich, Germany, revised 02 Apr 2011.
- D60 - Microeconomics - - Welfare Economics - - - General
- D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance
- G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-01-16 (All new papers)
- NEP-ARA-2011-01-16 (MENA - Middle East & North Africa)
- NEP-URE-2011-01-16 (Urban & Real Estate Economics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Malpezzi, Stephen & Mayo, Stephen K, 1987. "The Demand for Housing in Developing Countries: Empirical Estimates from Household Data," Economic Development and Cultural Change, University of Chicago Press, vol. 35(4), pages 687-721, July.
- Hasan, Zubair, 1988. "Distributional equity in Islam," MPRA Paper 2785, University Library of Munich, Germany.
- Richard Arnott, 2008. "Housing policy in developing countries. The importance of the informal economy," Working Papers 200801, University of California at Riverside, Department of Economics, revised Jan 2008.
- Hasan, Zubair, 1997. "Fulfilmen of Basic Needs: Concept, Measurement and Muslim Countries’ Performance," MPRA Paper 3123, University Library of Munich, Germany.
Blog mentionsAs found by EconAcademics.org, the blog aggregator for Economics research:
- How to finance housing in Islamic economies
by Economic Logician in Economic Logic on 2011-02-18 15:30:00
- Hasan, Zubair, 2012. "Islamic norms, the excel formula and home financing models," MPRA Paper 47955, University Library of Munich, Germany, revised 2013.
- Hasan, Zubair, 2012. "Excel formula and Islamic norms for home financing," MPRA Paper 42835, University Library of Munich, Germany.
- Hasan, Zubair, 2012. "Mortgage contracts in Islamic home finance: Musharakah Mutanaqisah program vs. Zubair diminishing balance model," MPRA Paper 39067, University Library of Munich, Germany.
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