
Why
Islamic Financing ?
Islamic
Financing a house purchase (or other real property, for that
matter) involves in rental or lease to own. Question arises as
to the Islamic economic
advantage of this kind of arrangement. If the interest rates are high,
this
form of purchase is advantageous, disadvantageous if rates are
low.
On the
other hand, if the value of real estate is rising rapidly, the Islamic
system
would be disadvantageous, as the Islamic financing institution would
share in
the
increase of value.
Islamic
Banking chalked the possible financial disadvantage
up to the principle of C.O.B.M.—Cost of Being Muslim.