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

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 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.