The American Muslim Community and LARIBA (Islamic) Financing

Introduction
Home Mortgages in the United States
The American Muslim Community and LARIBA (Islamic) Financing
LARIBA (Islamic) Mortgages - The Market
The LARIBA Lease Purchase Model
The Strategic Approach to LARIBA (Islamic) Mortgages
Conclusions


The American Muslim Community and LARIBA
(Islamic) Financing

The American Muslim Council (AMC) in a popular survey published in December 1992 estimated that the population of Muslims in the United States ranges between 5to 8 million. A most acceptable figure is an average of 6 million. In the United States the State of California has the largest Muslim population among all states. It is estimated that there are at least 1,200,000 Muslims living in California. Following California are the States of New York (4.7% of total state population), Illinois (3.6%), New Jersey (2.5%), Indiana (3.2%) and Michigan. There is significant Muslim community living in other states like Virginia, Texas, Ohio and Maryland.

Most of the Muslims in the United States have been integrated in the RIBA conventional banking system prevailing in the United States. Most take advantage of RIBA interest based FDIC insured deposits in the banks, borrow money for buying homes using RIBA mortgages, use their credit cards and sometimes extend its use as a source of RIBA based credit and take home equity RIBA based line of credit. Most of the affluent members of the Muslim business community have used the institutional RIBA financing through the banking system in the USA and accumulated significant wealth through its use. Fatwas (Islamic legal opinions) based on Muslims being a minority and/or that RIBA is usury and not interest have been used by many leaders in some significant communities to justify RIBA. Most affluent and upper middle class members of the community have been used to and the beneficiaries of RIBA system. So, it was unconvincing for many to try to make them change over even in a small way because of the HARAM (forbidden) issue. A number of justifications were used to allow members of the community to continue participating in RIBA activities. Examples are: the fact that the laws of LARIBA cannot be upheld by a minority which lacks the credible institutions, which can offer HALAL (lawful) LARIBA, financing and banking. Another was the claim that RIBA and LARIBA are the same and that the difference is a matter of replacing the word interest with the word profit. A third excuse for not accepting LARIBA would be the failure of the Islamic financial institutions in Egypt.

For a newly emerging alternative system to prevail and succeed it is an understatement to say that it is a very difficult uphill battle. Unless the individual is motivated deeply by the strict adherence to the Shari'aa, the Quraan and the Sunna we found it to be almost impossible to capture people’s interest and imagination. It is interesting to report, based on our experience that people thought that we are "silly" to try to bring a LARIBA concept in a world run by RIBA. We even were ridiculed by the closest of friends.

In all fairness, it is our feeling, based on first hand experience and our in-depth knowledge at the grassroots level of the community, that a large portion of the Muslim middle class households have accepted RIBA mortgages against their will. It is our feeling that many of these households would convert to LARIBA if available and competitive. There are many people, Muslims and non-Muslims, who feel disenfranchised by traditional methods of financing, or who feel - correctly or not - that they do not have adequate access to credit, or that the terms of the credit that is available to them are morally objectionable or economically unfeasible for them. W are reminded of the successes of the Credit Union industry among blue-collar workers in the U.S., many of whom simply cannot afford traditional bank accounts because they live from paycheck to paycheck and cannot maintain a minimum balance.

Introduction
Home Mortgages in the United States
The American Muslim Community and LARIBA (Islamic) Financing
LARIBA (Islamic) Mortgages - The Market
The LARIBA Lease Purchase Model
The Strategic Approach to LARIBA (Islamic) Mortgages
Conclusions

THIS IS NOT A SOLICITATION TO BUY,SELL, &/OR SOLICIT BUSINESS AND FINANCING

IT IS A PROGRESS REPORT ON THE DEVELOPMENT OF THE COMPANY.

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