Ijaara
Notable Scholars of Islamic
             Finance
    Abdulkader Thomas

     SHAPE Financial Corporation


    Mufti Taq...
Islamic Finance History
    Developed in mid 8th century

     Considered the early form of capitalism
     Created man...
Conflict of “Interest”
    Religion versus environment

     Required to engage in Islamic finance
      solutions
    ...
Western Banking System
    Dollar

    • Dollar is the Asset
    • Charges for the Use of
      the Asset
    • Usury or ...
Islamic Banking System
    Asset Based



    Money     Asset



    Service/Good is the Asset

It’s All About the
Process
The Process
               Halal




              Non Halal
Western Banking Process
                 $300,000




      $330,000
Calculating Interest
    $300,000 = Principle



    10% = Interest



    Mortgage Payment = Principle + Interest



 ...
Islamic Banking Process


      $325,000




                 $300,000
What are you Paying for?
    For use of the asset you are being charged

    rent

    You are paying the fixed amount of...
The Process
               Halal




              Non Halal
Q&A
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Islamic Financing Presentation

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A brief overview on the process of Ijaara

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Islamic Financing Presentation

  1. 1. Ijaara
  2. 2. Notable Scholars of Islamic Finance Abdulkader Thomas   SHAPE Financial Corporation Mufti Taqi Usmani   (Dar Ul Uloom Karachi) Molana Dr. Imran Ashraf Usmani   (Shariah Advisor Meezan Bank) Molana Dr. Ijaz Samdani   (Darululoom Karachi)
  3. 3. Islamic Finance History Developed in mid 8th century   Considered the early form of capitalism  Created many modern banking solutions ○ Checks, partnerships, corporations, trusts, etc . Modern Islamic finance   Based mostly in the Middle East  Steady growth rate of approximately 10-15%
  4. 4. Conflict of “Interest” Religion versus environment   Required to engage in Islamic finance solutions  Virtually no viable Islamic solutions exist in the current environment Need for Islamic institutions   Provide relief for conflict of interest
  5. 5. Western Banking System Dollar  • Dollar is the Asset • Charges for the Use of the Asset • Usury or Riba o Charging for the Use of Money
  6. 6. Islamic Banking System Asset Based  Money Asset  Service/Good is the Asset 
  7. 7. It’s All About the Process
  8. 8. The Process Halal Non Halal
  9. 9. Western Banking Process $300,000 $330,000
  10. 10. Calculating Interest $300,000 = Principle  10% = Interest  Mortgage Payment = Principle + Interest  Mortgage Payment = $300,000 + $30,000  Total Payment = $330,000 
  11. 11. Islamic Banking Process $325,000 $300,000
  12. 12. What are you Paying for? For use of the asset you are being charged  rent You are paying the fixed amount of  principle ($300,000) You are also paying the fixed amount for  use of the asset, or rent ($25,000) Total Payment = $325,000 
  13. 13. The Process Halal Non Halal
  14. 14. Q&A

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