Ijarah Finance launches new product

by Jayden Fennell 14 Jun 2022

A Sydney Islamic finance firm has created Sharia-compliant financing for builders and property developers.

Ijarah Finance’s new product gives leverage and capability to help builders take on construction projects of up to $5 million using a non-interest finance approach known as “Ijarah”, a term in the Arabic language meaning “lease”.

In Islamic finance, the asset is the prime subject matter in the relationship between the funder and the customer, so the customer pays rent for the use of the property/asset rather than interest on money being lent. Ijarah Finance’s approach adopts the principle of rent to own or “Ijarah Muntahia Bi Tamleek”, which is known as  “rent ending with ownership”  in Sharia financing.

“Our office has been based in south-west Sydney since 2003, so we have many builders and developers of the Muslim faith seeking finance to build commercial developments without undertaking a conventional interest-based loan arrangement,” said Ijarah Finance director Walid (Wally) Ayad (pictured).

“We’re very excited that we can now offer Ijarah finance for construction and development projects up to $5 million.”

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Ijarah Finance has helped customers build single homes and duplexes since its inception using a Sharia-based finance contract.

With the development of this new finance product, Ayad said it could finance projects above the standard duplex site and now fund multi-unit construction projects, townhouse developments and industrial property construction projects at acceptable LVRs.

“With clients from all over Australia turning to Ijarah Finance to grow their property portfolio without compromising their faith-based finance criteria, we are confident that this new product will be well received as it will help many people expand their investment projects,” he said.

According to Ayad, there were other product developments in the pipeline at Ijarah.

“Whilst we’re very excited with this new funding ability, we’re not stopping there,” he said.

“There are a few other new niche products in the works which will be released in the coming months and these products will stand out and fill the gap with offerings not already serviced by other Islamic finance providers.”

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Ayad said when developing a new product, the company’s experience and time within the industry had allowed Ijarah Finance to develop client-centric solutions.

“We have been able to continuously develop and amend these products where necessary to make improvements and widen the scope of the product offerings,” he said.

“This ability comes down to being in the industry for as long as we have been, as well as our experience with the Muslim community who require this type of financing.”

Ijarah Finance is offering accreditation to brokers who have experience in offering Islamic finance or those who have access to the wider Muslim community requiring non-interest based financing.