Islamic home financing and ownership transfer to the customer: Models compared

Hasan, Zubair (2014): Islamic home financing and ownership transfer to the customer: Models compared.

Abstract

In my latest article on Islamic home financing models in the ISRA Journal June 2013, I had shown that the Zubair Diminishing Balance Model (ZDBM) is free of return compounding and the transfer of ownership to the customer perfectly matches the payments’ rate; the two norms Islamic models must meet. It is satisfying to note that Nabil in the same issue of the journal takes up these issues in a comprehensive and tightly argued conceptual paper and convincingly vindicates my position on the compounding issue. However, he argues that the transfer of ownership in the ZDBM also does not meet the ideal even as it is closer to the norm than other constructs. The objective of this brief note is to clarify my position on this latter issue.

• Item Type: MPRA Paper
• Language: English
• Keywords: Shari’ah norms; home financing, ZDBM; MMP; Segmental murabahah
• Subjects: G - Financial Economics > G2 - Financial Institutions and Services; G - Financial Economics > G2 - Financial Institutions and Services > G21 - Banks ; Depository Institutions ; Micro Finance Institutions ; Mortgages

References

Zubair Hasan (2013): Islamic norms, Excel formula and home financing models, ISRA Journal of Islamic Finance, Volume 5, Issue `, June. PP. 9 - 27

Nabil Ben Mohammad Al-Maghrabi (2013): Conceptual analysis of Islamic home financing models, ISRA Journal of Islamic Finance, Volume 5, Issue `, June. PP. 29 - 88