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Islamic home financing and ownership transfer to the customer: Models compared


  • Hasan, Zubair


In my latest article on Islamic home financing models in the ISRA Journal June 2013, I had shown that the Zubair Diminishing Balance Model (ZDBM) is free of return compounding and the transfer of ownership to the customer perfectly matches the payments’ rate; the two norms Islamic models must meet. It is satisfying to note that Nabil in the same issue of the journal takes up these issues in a comprehensive and tightly argued conceptual paper and convincingly vindicates my position on the compounding issue. However, he argues that the transfer of ownership in the ZDBM also does not meet the ideal even as it is closer to the norm than other constructs. The objective of this brief note is to clarify my position on this latter issue.

Suggested Citation

  • Hasan, Zubair, 2014. "Islamic home financing and ownership transfer to the customer: Models compared," MPRA Paper 53105, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:53105

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    Shari’ah norms; home financing; ZDBM; MMP; Segmental murabahah;

    JEL classification:

    • G2 - Financial Economics - - Financial Institutions and Services
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages

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