MCCA, ICFAL, EFSOL and Amanah Shariah Home Financing Products

Answered according to Hanafi Fiqh by Askimam.org

Salam Alaikum

I’m looking to purchase a house in Australia

We have a few Islamic Finance Options but i’m unsure if they are infact halal.

They all use Ijarah Princible ,but the conditions i’m unsure .

1) MCCA

Link ; www.mcca.com.au/how-it-works

2) Amanah.com.au

Link : www.amanah.com.au

3) ICFAL :

www.Icfal.com.au

4) EFSOL:

www.efsol.com.au

Jazakallah Khair

Answer

In the Name of Allah, the Most Gracious, the Most Merciful.

As-salāmu ‘alaykum wa-rahmatullāhi wa-barakātuh

1. We have browsed through the MCCA website. We understand that the home financing product of MCCA is based on Ijarah Muntahiyah Bi al-Tamleek (Lease and ownership upon termination). Therefore all the rules and laws of such a concept will be applicable. Furthermore the financier appoints the client as agent to identify the house. The house is purchased by the financier and leased to the client for a fixed period of time and gifted to the client upon expiry of the lease. The concept in general is Shariah Compliant. However we cannot comment on the specific of the contract unless we receive the actual underlying documentation. Kindly submit the terms and conditions and any other underlying documentation/forms in order for us to issue a specific ruling.

 

2. We understand from the Amanah website that the home financing product is based on the principles of Wakalah (agency), Ijarah (lease) and Wa’d (promise). Therefore all the rules and laws to the above concepts will be applicable. Furthermore we understand that the financier appoints the customer as the agent in purchasing the home. The financier leases the asset to the customer for a fixed period of time with profit. The financier undertakes to sell the asset to the customer upon maturity and final payment. The concept is Shariah Compliant in general. However we need to understand how the contracts are separable and independent of each other. What if the financier does not sell the asset to the customer? Does the customer still have a legal claim against the financier? Is there any contravention in the Australian Law that prevents the customer from claiming for the asset? Moreover what is the Shariah flow of funds? Kindly also submit the underlying documentation/forms including terms and conditions of the contract in order for us to issue a specific ruling.

 

3. We have reviewed the ICFAL product and confirm that the product is not Shariah Compliant. We are currently in discussions with the management of ICFAL in order to resolve the matter and ensure the product is Shariah Compliant from our perspective.

 

4. The efsol Easyhome and EasyHome Saver products are based on the concepts of Musharakah Muntaqisah (Diminishing Musharakah) and Mudarabah (sweat partnership) and Musharakah (business partnership). The information provided on the website does not clarify and expound on the Shariah concepts as detailed above. Kindly submit the terms and conditions and any other underlying documentation/forms in order for us to issue a specific ruling.

 

We are willing to engage with the financiers of the above companies in order to ensure the product is Shariah Compliant.

 

And Allah Ta’āla Knows Best

Ismail Desai,

Darul Iftaa

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