In glad tidings to New Zealand’s Muslims, a finance company has proposed plans to provide offer interest-free mortgages to Muslims that agrees with Islamic Shari`ah.
“They want to own their own homes, they want to be New Zealanders, they want their quarter-acre paradise, they want to raise their kids,” Brian Henry, Amanah managing director, told Stuff.co.nz on Thursday, 30 April.
The first Shari`ah-compliant mortgages, KiwiSaver, was launched earlier this year by Amanah Ethical.
The scheme charges a “purification payment” to cleanse any investment income that might be generated though ways deemed haram in Islam, such as those related to alcohol, tobacco, gambling, weapons, pornography and nightclubs.
Henry said his company intended to provide finance products that comply with Islam, noting that paying or receiving interest on loans is forbidden in Islam.
Henry said it was important to understand this did not mean customers got the money for nothing.
Islamic loans involve various alternative ways for the borrower to repay the lender at a premium, while technically not charging interest.
Henry said while there were only 43,000 Muslims in New Zealand at the time of the latest census, it was a “dream market”.
New Zealand’s growing migrant Muslim community was highly-educated and in good jobs, he said.
Kiwi Muslims had the means to own their own homes but did not want to go against their faith in order to become homeowners.
The new mortgages system is expected to offer a great help to Australian Muslims.
Auckland woman Sara Jawadi is one of them who has been lobbying banks to provide an interest-free home loan product for Muslim customers like herself, Radio New Zealand reported on Thursday.
Moving to New Zealand 11 years ago, the 28-year-old said Kiwi Muslims had to choose between their religion and financial stability.
“I’m not going back to Iraq anytime soon, and I want to create some sort of stability for my family,” she told Radio NZ.
“With rent, you’re not guaranteed that you can stay in that place for too long … we’re sort of trying our best to find an alternative.”
Jawadi had contacted ANZ, BNZ, Westpac and Kiwibank with a proposal, but told Radio NZ none had responded.
Westpac and Kiwibank said they did not offer a specific Shari`ah-friendly product and did not have any plans to do so in the near future.
ANZ spokesman Stefan Herrick said demand for Islamic loans were “very low” and the bank did not offer a specific product catering tothis community.
“However, we’re always happy to talk to customers – Muslim or otherwise – about how we can help meet their needs.”