IN THE NAME OF ALLAH,MOST GRACIOUS, MOST MERCIFUL AFFORDABLE HOME OWNERSHIP THROUGH ISLAMIC FINANCE BY: PERVEZ NASIM President ISLAMIC CO-OPERATIVE HOUSING CORPORATION LTD. TORONTO, CANADA
PREAMBLE THE VERY FUNDAMENTAL CONCEPT FOR MUSLIMS TO UNDERSTAND AND ACCEPT IS THE FACT, AS REVEALED BY ALLAH, OUR CREATOR AND SUSTAINER, IN THE HOLY QURAN: “AND IT IS FOR ALLAH WHATEVER IN THE HEAVENS AND WHATEVER IN THE EARTH.”
IN OTHER WORDS, WE THE HUMAN BEINGS; DO NOT OWN ANY THING IN THIS WORLD, ARE JUST A TRUSTEE , AND, WILL HAVE TO ACCOUNT FOR ANY AND ALL BREACHES OF THIS TRUST, ABUSE, MISUSE AND INJUSTICES
RIBA (INTEREST) IS FORBIDDEN THE HOLY QURAN, IN NO UNCERTAIN TERMS, FORBIDS AND CONDEMNS ` ALL DEALINGS WITH RIBA, AS WELL AS, PARTICIPATION AND WITNESSING SUCH TRANSACTIONS
MISCONCEPTIONS AMONG MUSLIMS PARTICULARLY, AND AMONG NON MUSLIMS, AS WELL ! INTEREST FREE BANKING AND FINANCING MEANS; ‘CONVENTIONAL BANKING AND FINANCING, DELETE THE WORD “INTEREST”, ADD THE WORD PROFIT”!’`
WHAT IS THE DIFFERENCE BETWEEN A BUSINESSMAN AND A MUSLIM BUSINESSMAN? – TRUTHFUL AND NO DECEPTIONS; – HONESTY AND INTEGRITY; – EXPECTS BLESSINGS AND REWARDS FROM THE CREATOR, IN ADDITION TO, MONETARY PROFIT; – CONSCIOUSNESS OF SOCIAL AND ENVIRONMENTAL BENEFITS RATHER THAN JUST MONETARY BENEFITS;
WILLINGNESS TO SHARE THE CONSEQUENCES SHARING OF GAINS, AS WELL AS, LOSSES IN SOME PREDETERMINED RATIO
INTEREST FREE INTEREST FREE ISLAMIC ISLAMIC FINANCING FINANCING MODELS: MODELS:
LET US NOW EXAMINE SOME OF THE INTEREST FREE ALTERNATIVES AVAILABLE TO US FOR FINANCING: MODEL A: IJARAH OR LEASE/RENTAL MODEL B: MURABAHA OR PURCHASE ON INSTALLMENTS MODEL C: MUSHARIKAH OR PARTNERSHIP MODEL D: MUDARABAH OR LABOR AND MONEY PARTNERSHIP `
Islamic Co-operative Housing Corporation Ltd. • North America’s First Islamic Financial Institution • An Interest-free Housing and Investment Scheme
Islamic Co-operative Housing Corporation Ltd. THE SHARIA MODEL ADOPTED BY THE CO-OP • Musharikah or Partnership model was adopted; • For its simplicity and practical nature for the long term transactions; • The model was modified a little to make it a Decreasing Partnership; • A Partnership between a Family and the Community (Co-op);
A PARTNERSHIP Between the Islamic Financial Institution and The Prospective Home Owner
FACTORS AFFECTING THE FINACING COST • EXPECTED RATE OF RETURN ON INVESTMENT • APPRECIATION IN THE PROPERTY VALUE • SHARING THE APPRECIATION WITH THE HOME BUYER (WHAT RATIO) • ADMINISTRATIVE OVERHEADS • LENGTH OF FINANCING CONTRACT • DEFAULTS AND LOSSES
Islamic Co-operative Housing Corporation Ltd. MEMBERS COMMITMENTS: •PAY $75 MEMBERSHIP FEE TO JOIN •BUY 6 SHARES OF $100 EACH ANNUALLY •INVEST FIRST AND BUY SHARES •20% OF 1ST $100,000 COST OF HOUSE •40% OF UP TO THE NEXT $100,000 COST •SHARE GAIN/LOSS 10% WITH CO-OP`
Islamic Co-operative Housing Corporation Ltd. SHARING OF GAIN OR LOSS • As a result of sale/transfer of the housing unit any gain or loss realized will be divided as follows: – A. If, at that time, the member has more than 50% shares - 10% to the Co-op and 90% to the member. – B. If the member has 50% or less shares - 20% to the Co-op and 80% to the member. • The capital gain or loss will be shared after making an adjustment for authorized improvements, expansions and certain legal expenses incurred by the member .
Islamic Co-operative Housing Corporation Ltd. THE CO-OP IS BEING MANAGED BY A BOARD OF SEVEN VOLUNTEERS
Islamic Co-operative Housing Corporation Ltd. Increase in Membership 2500 2000 Members 1500 1000 500 0 1982 1983 1985 1987 1989 1991 1993 1995 1997 1998 1999 2000 2001 Year Current year f igures to April 2001
Islamic Co-operative Housing Corporation Ltd. Canada C a n a d a M em bers by P rov in ce 1 Y ukon , PEI (2) 2 New Brunsw ick (1) 3 New foundland (1) 13 Nova scotia (1) 16 S aska tchew an (1) 26 M anitoba (1) 30 B .C. (1) 1 34 Q uebec (1) 55 A lberta (1) 1,187 O ntario (1) 3 26 30 55 1 34 2 13 16 1187
Islamic Cooperative Housing Corporation Ltd. United States 1 Minnesota New York Washington 1 6 New Indiana Illinois Jersey 8 W. Virgina California 7 5 Utah 1 Missouri 4 1 Virginia 1 4 1 N. Carolina 5 Texas Georgia United States M em bers by Sta tes 5 2 1 M em ber (6) 2 M em bers (1) Florida 4 M em bers (2) 5 M em bers (3) 6 M em bers (1) 7 M em bers (1) O verseas - 8 0 M e m be rs 8 M em bers (1)
Islamic Co-operative Housing Corporation Ltd. Increase in Housing Units 450 400 350 No. of Units 300 250 200 150 100 50 0 1982 1983 1985 1987 1989 1991 1993 1995 1997 1998 1999 2000 2001 Year Current year f igures to April 2001
Islamic Co-operative Housing Income in Million $ 0.0 0.2 0.4 0.6 0.8 1.0 1.2 1.4 1.6 1.8 Corporation Ltd. 1983 1985 Increase in Income 1987 1989 1991 Year 1993 1995 1997 1998 1999 2000
Islamic Co-operative Housing Corporation Ltd. Sharing Income Operating Expenses Maximum Limit 20% Patronage Dividend 80%
Islamic Co-operative Housing Corporation Ltd. Patronage Dividend 10.0 8.0 Dividend % 6.0 4.0 2.0 0.0 1983 1985 1987 1989 1991 1993 1995 1997 1998 1999 Year
Islamic Co-operative Housing Corporation Ltd . PRESENT STATUS • In nineteen years, purchased over four hundred and ten (410) houses; • Sold over $28 Million worth of Shares; • Gave Dividends between 6% and 10%. For the last year it was 7%; • Membership has grown to over 2,300 including a good number from overseas as investors;
• Islamic Co-operative Housing Corporation Ltd. • Serving the Muslim Community since 1981 • OUR OTHER PROJECTS: OUR OTHER PROJECTS: OUR OTHER PROJECTS: OUR OTHER PROJECTS: • ANSARCO INC. ANSARCO INC. ANSARCO INC. ANSARCO INC. – Investments in Muslim Businesses • AL AL AL AL- - - -AMIN AMIN AMIN ASSOCIATION AMIN – INTEREST-FREE RETIREMEMT SAVINGS PLANS
OUR OTHER PROJECTS THROUGH ANSARCO GROUP OF COMPANIES: • CAR PURCHASE PLANS (COP) • RETAIL PLAZA JOINT VENTURE IN ALBERTA • BUSINESS & EQUIPMENT FINANCING • INTEREST FREE RETIREMENT PLANS • HEALTH CARE RELATED PROJECTS .. ……. • MEDICAL BUILDING PURCHASE ……. • MEDICAL CLINIC • HOUSE BUILDING PROJECT … 150 HOUSES (ANSAR CONSTRUCTION LTD.) • ISLAMIC INSURANCE CO. (TAKAFUL) SOON INSHALLAH!
Islamic Co-operative Housing Corporation Ltd. OTHER COMMUNITIES COPIED OUR MODEL: ST. LOUIS MONTREAL SAN FRANCISCO NEW JERSEY/NEW YORK AND MANCHESTER, U.K. …….. ………. LONDON IN PROGRESS
FUTURE DIRECTIONS • Now we are focusing more on major business projects that can provide community services in an Islamic environment, as well as, provide employment opportunities for the community; • For example Health Care Projects; • Real Estate Property Development Projects, INSHALLAH! (GOD WILLING)`
PLEASE VISIT OUR WEB SITE The Financial Link to the Community http://www.isnacanada.com/ichc.htm
THANK YOU AND MAY ALLAH BLESS YOU! THANK YOU FOR YOUR PATIENCE!
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