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"Islamic house financing:current models and a proposal from social perspective

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  • Hasan, Zubair

Abstract

Shelter 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 of a substantial proportion of the population in most countries around the world, especially Muslim, Islamic banks have entered the field with various schemes for home financing. In this infant industry, this effort is understandably guided by the profit motive, but a social dimension has to surface in the course of time.Unfortunately, the models banks currently use for home financing remain under the juridical gaze, more so as the practice is not always found to be transparent. This paper looks at Islamic home financing models in a broader societal context. It evaluates the efficacy of the current financing structures practised 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 does not, presumably,violate any other Islamic norm. Finally, the paper makes some policy suggestions to integrate Islamic home financing into the broader social goals of an Islamic economy.

Suggested Citation

  • 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.
  • Handle: RePEc:pra:mprapa:31638
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    File URL: https://mpra.ub.uni-muenchen.de/31638/1/MPRA_paper_31638.pdf
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    References listed on IDEAS

    as
    1. Zubair Hassan, 1997. "Fulfilment Of Basic Needs: Concept, Measurement, And Muslim Countries' Performance," IIUM Journal of Economics and Management, IIUM Journal of Economis and Management, vol. 5(2), pages 1-38, June.
    2. 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.
    3. 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.
    4. Hasan, Zubair, 1988. "Distributional equity in Islam," MPRA Paper 2785, University Library of Munich, Germany.
    5. repec:wbk:wbpubs:28043 is not listed on IDEAS
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    Cited by:

    1. Hasan, Zubair, 2012. "Excel formula and Islamic norms for home financing," MPRA Paper 42835, University Library of Munich, Germany.
    2. 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.
    3. Hasan, Zubair, 2012. "Islamic norms, the excel formula and home financing models," MPRA Paper 47955, University Library of Munich, Germany, revised 2013.

    More about this item

    Keywords

    Housing problem; basic needs; resource allocation; ruralurban migration; conventional model; BBA in housing; the MMP model; diminishing balances; planning.;

    JEL classification:

    • D10 - Microeconomics - - Household Behavior - - - General
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
    • D60 - Microeconomics - - Welfare Economics - - - General
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages

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