Can an Islamic Model of Housing Finance Cooperative Elevate the Economic Status of the Underprivileged?

Ebrahim, M. Shahid

doi:10.2139/ssrn.1302922

Cited by 26 publications

(48 citation statements)

References 62 publications

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“…The rationale behind this is elaborated in Salleh et al (2014) as emanating from the Qur'anic contrast of Riba with charity (sadaqah) (Q 2: 276-277, 30:39). This implies incorporating the Qard Al-Hasan facility in mutual/financial cooperatives and employing the technology of Accumulating Savings and Credit Associations (ASCRAs): (i) to fund homes for the poor and underprivileged (Ebrahim, 2009); and (ii) offer inexpensive short-term credit facility as an alternative to usurious payday loans (Salleh et al, 2014). The employment of Qard Al-Hasan is deemed charitable helping social cohesiveness in contrast to ribawi loans, which factionalizes society (see again Ibn Taymiyah, 1951).…”

Section: Islamic Micro and Social Financementioning

confidence: 99%

Islamic Banking and Finance: Recent Empirical Literature and Directions for Future Research

Abedifar

Ebrahim

Molyneux

et al. 2015

Journal of Economic Surveys

167

102

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This paper examines the recent empirical literature in Islamic banking and finance, highlights the main findings and provides a guide for future research. Early studies focus on the efficiency, production technology and general performance features of Islamic versus conventional banks, whereas more recent work looks at profit‐sharing and loss‐bearing behaviour, competition, risks as well as other dimensions such as small business lending and financial inclusion. Apart from key exceptions, the empirical literature suggests no major differences between Islamic and conventional banks in terms of their efficiency, competition and risk features (although small Islamic banks are found to be less risky than their conventional counterparts). There is some evidence that Islamic finance aids inclusion and financial sector development. Results from the empirical finance literature, dominated by studies that focus on the risk/return features of mutual funds, finds that Islamic funds perform as well, if not better, than conventional funds – there is little evidence that they perform worse than standard industry benchmarks.

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Section: Islamic Micro and Social Financementioning

confidence: 99%

Islamic Banking and Finance: Recent Empirical Literature and Directions for Future Research

Abedifar

Ebrahim

Molyneux

et al. 2015

Journal of Economic Surveys

167

102

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“…Our approach is consistent with that of Archer and Smith (2013) and Ebrahim (2009), Baltensperger (1978, Foote et al (2008). This encompasses stripping the put option to default by ensuring the borrower's equity does not deteriorate into a negative region over all states of economy (i.e., for both types of asset with an upward or downward market trend).…”

Section: Resultsmentioning

confidence: 63%

Can Loan Valuation Adjustment (LVA) approach immunize collateralized debt from defaults?

et al. 2019

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This study focuses on structuring tangible asset backed loans to inhibit their endemic option to default. We adapt the pragmatic approach of a margin loan in the configuring of collateralized debt to yield a quasi‐default‐free facility. We link our practical method to the current Basel III (2017) regulatory framework. Our new concept of the Loan Valuation Adjustment (LVA) and novel method to minimize the LVA converts the risky loan into a quasi risk‐free loan and achieves value maximization for the lending financial institution. As a result, entrepreneurial activities are promoted and economic growth invigorated. Information asymmetry, costly bailouts and resulting financial fragility are reduced while depositors are endowed with a safety net equivalent to deposit insurance but without the associated moral hazard between risk‐averse lenders and borrowers.

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“…Rahman's and other CMIs like Shahrour and Ramadan contributions on the issue of ribā/interest echo some responses from Muslim economists and even Muslim scholars on the issue (cf El-Gamal, 2003;Kuran, 2006Kuran, , 2011Ebrahim, 2009;Ebrahim et al, 2012;Salleh et al, 2012 to mention some). CMI's main contribution, however, lies in their methodologies, where they employ 'structured notions of textual/contextual analysis where emphasis is placed upon a humanistic law that is suggestively and generally guided, and not literally and textually dictated, by the divine intention' (Hallaq, 1997, p. 254) 15 .…”

Section: Resultsmentioning

confidence: 94%

“…Saleem (2006) gives examples of banks' practices especially in relation to credit cards' business where banks charge up to 20% on credit card loans to customers not able to make repayments on time (poorer customers), this is despite limits imposed of rates of interests on many parts of the worlds. Ebrahim (2009) provides examples of how the poor are disadvantaged in the home/mortgage market, facing high cost of funding and getting their homes repositioned. Ribā, therefore, is 'not today limited to those transactions depicted in the traditions of Muhammad; it is a much broader concept that was simply exemplified (then) by those forms of (inequitable/inefficient) transactions' (Balala, 2010, p. 71).…”

Section: Implications For Today's Banking System and Bank-interestmentioning

confidence: 99%

“…On the issue of ribā/interest, the paper will incorporate Rahman's thought with other CMIs (like Shahrour and Ramadan) and contemporary economists, finance and law scholars' debates on the issue (e.g. El-Gamal, 2003;Saleem, 2006;Kuran, 2006Kuran, , 2011Ebrahim, 2009;Balala, 2010;Ebrahim et al, 2012;Salleh, Jaafar, & Ebrahim, 2012 to mention some). This is a significant contribution to Islamic accounting research, as the critical views of these intellectuals have not been previously discussed in this literature.…”

Section: Introductionmentioning

confidence: 99%

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Critical Muslim Intellectuals’ discourse and the issue of ‘Interest’ (ribā): Implications for Islamic accounting and banking

Kamla

Alsoufi

2015

Accounting Forum

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a b s t r a c tThis article introduces and employs Critical Muslim Intellectuals' (CMIs) methodological approaches and debates to discuss the issue of bank-interest/ribā in Islam. It builds specifically on Fazlur Rahman's (Pakistan) methodology and debates and counters them with the traditionalists' approaches to the issue of ribā. The paper highlights the displacement of CMIs' discourses from mainstream Islamic accounting and banking literature and practices and argues that such displacement is hindering the emergence of genuine, innovative and critical debate on the issue of ribā in particular and Islamic accounting and banking in general. The paper elaborates on the need to incorporate the critical debates and thought of CMIs into the fields of Islamic accounting and banking if these fields wish to contribute to enhancing socio-economic justice and finding an alternative to their conventional, neoliberal counterparts.

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Can an Islamic Model of Housing Finance Cooperative Elevate the Economic Status of the Underprivileged?

Cited by 26 publications

References 62 publications

Islamic Banking and Finance: Recent Empirical Literature and Directions for Future Research

Islamic Banking and Finance: Recent Empirical Literature and Directions for Future Research

Can Loan Valuation Adjustment (LVA) approach immunize collateralized debt from defaults?

Critical Muslim Intellectuals’ discourse and the issue of ‘Interest’ (ribā): Implications for Islamic accounting and banking

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