LOANS, MORTGAGES & RIBA ARE MUSLIMS AT RISK? | Dr. Yasir Qadhi

Summary

Highlights

• Dr. Yasir Qadhi explains the technical definition of Riba and why it's prohibited under Sharia law. 📚
• Interest payments shift financial risk to borrowers, making conventional loans exploitative. 🔄
• Islamic finance prefers risk-sharing over risk-shifting, ensuring fairness among all parties. 💪
• A challenge for Muslims is identifying Riba in disguised forms in modern financial products. 🔍
• Proposals exist for an Islamic finance system that stands in contrast to traditional banking models. 🏗️
• An argument persists on reevaluating Riba rulings due to modern currencies' inflationary nature. 💸

Key Takeaways

• Riba is inherently exploitative and unjust, making it haram for Muslims. 📉
• Traditional banking systems shift risk to the borrower, while Islamic finance promotes risk-sharing, advocating fairness. ⚖️
• Islam prohibits interest-based transactions, pushing for ethical finance alternatives like profit-sharing. 🏦
• Islamic finance isn't exclusive to Islam; it's shared across Abrahamic faiths, highlighting common ground in ethical funding practices. 🤝
• Establishing ethical finance systems in non-Muslim majority countries requires vision and leadership. 🌍

Overview

Chapters

• 00:00 - 00:30: Introduction to Islamic Finance and Riba The chapter introduces the concept of Islamic Finance, focusing on Riba. It sets the stage for a technical discussion on Riba, which is a contentious issue in Islamic Finance. The chapter prompts a definition of Riba from an Islamic perspective, aiming to explain its problematic nature within Shariah law.
• 00:30 - 03:00: Defining Riba and its Issues In this chapter, the concept of 'Riba' (often interpreted as interest or usury) is explored. The discussion involves an overview of different categories of Riba, drawing from classical texts. It is noted that these classical interpretations can be quite confusing for the general audience.
• 03:00 - 05:00: Riba in American Financial Context The chapter discusses the disconnect between traditional definitions of Riba (usury) as found in classical Islamic texts and their relevance in the modern American financial context. It highlights how practical examples such as exchanging wheat for barley or dates are outdated and can lead to confusion for Muslim Americans trying to conduct financial transactions today.
• 05:00 - 08:30: The Unfairness of Conventional Loans and Risk Models This chapter discusses the concept of Riba in American society, described as a severe practice where a premium must be paid by the borrower to the lender. Riba is considered prohibited as per Sharia, highlighting an inconsistency in the conventional loan and risk models.
• 08:30 - 12:00: Risk Sharing vs. Risk Shifting in Islamic Finance The chapter compares the concepts of risk sharing and risk shifting within the context of Islamic finance, using traditional banking practices as a point of contrast. It begins by describing a conventional loan scenario, for example with Bank of America or Chase, where a borrower is required to repay the loan amount plus interest or APR. This introduces the idea of risk being shifted to the borrower, as they bear the responsibility of repaying the principal plus interest from the outset. In Islamic finance, however, risk sharing strategies are emphasized, indicating a different approach to managing financial risk.
• 12:00 - 14:00: Prohibition of Riba Despite Mutual Agreement In this chapter titled 'Prohibition of Riba Despite Mutual Agreement,' the transcript discusses the Sharia perspective on financial transactions involving riba (interest). It explains that even if there is a mutual agreement between parties on the terms, such as a lump-sum payment or a flat fee associated with a principal loan amount, the presence of any surplus or premium (interest) is considered problematic. The example given involves taking a loan from a bank where the bank charges a specific interest rate (e.g., 3% or 5%). The discussion highlights the issues associated with indulging in such financial practices from a Sharia viewpoint.
• 14:00 - 16:00: Examples of Riba-Based Transactions The chapter discusses Riba (interest) in financial transactions and why it is prohibited in Islam, even when it might seem beneficial in business. It raises the question of why Allah prohibits Riba despite the apparent mutual benefits, such as profit-sharing and everyone appearing to be happy in the transaction. The transcript hints at the existence of various examples in real life where Riba can occur, sometimes leading to significant financial outcomes.
• 16:00 - 19:00: Analyzing Mortgages and Riba In this chapter, the discussion focuses on the fairness of mortgage profits and interest rates, particularly in the context of making significant profits while offering banks a minimal annual percentage rate (APR). The speaker asserts the occurrence of scenarios where individuals retain most profits and banks receive only a small APR, suggesting an imbalance in benefit distribution. This issue was highlighted around March 2020, just before the COVID-19 pandemic affected the U.S. economy, when such profit-making scenarios were evident.
• 19:00 - 22:00: Alternative Views on Riba and Fiat Currency The chapter discusses the challenges faced when the economy freezes, leading to the debtor's inability to maintain their principal amount. It highlights the legal stance where banks can still demand repayment of the principal along with interest despite economic hardships, pointing out the resulting injustices in such scenarios.
• 22:00 - 25:00: Nature of Loans in Islamic Finance In the chapter titled 'Nature of Loans in Islamic Finance,' the speaker discusses the nature of loans within Islamic banking and highlights issues of fairness. They emphasize that conventional banks often do not assume any risk and place the burden entirely on the borrower. In such scenarios, banks provide loans without concern for the borrower's outcome, requiring repayment with interest regardless of profitability. This situation, according to the speaker, is unfair because the bank does not share in the risks or potential losses of the venture.
• 25:00 - 30:30: Defining Islamic Finance The chapter titled "Defining Islamic Finance" explains the fundamental principles of Islamic finance, emphasizing the system's stance against traditional interest-based transactions, known as riba, which are considered unjust. Islamic finance promotes risk-sharing and requires equity participation rather than debt obligations. For instance, if a client approaches an Islamic bank like Chase or Bank of America for a business loan, the bank would not offer a conventional loan. Instead, they would engage in discussions about financing options that adhere to Islamic financial principles, such as equity financing or partnerships. The chapter illustrates how Islamic finance seeks to balance finance with ethical considerations and risk distribution.
• 30:30 - 36:00: Challenges and Attempts in Islamic Finance in the USA The chapter titled 'Challenges and Attempts in Islamic Finance in the USA' discusses the principles of Islamic finance, focusing on the risk-sharing model as opposed to the risk-shifting model prevalent in the conventional economic and finance systems. The text implies a collaborative approach where parties engage in discussions to construct a financial model that aligns with Islamic principles, suggesting a focus on building partnerships and shared responsibilities rather than transferring risks. This approach is highlighted as a key differentiation in Islamic finance practices in the USA.
• 36:00 - 43:30: Possibilities for Establishing Islamic Finance Systems The chapter 'Possibilities for Establishing Islamic Finance Systems' discusses the differences between traditional financial systems and Islamic finance. Traditional systems are described as risk-shifting, where the lender does not concern themselves with the borrower's situation once the money is lent. Islamic finance, however, is characterized as risk-sharing, where both parties share in profits and losses. The chapter highlights the perceived injustice in traditional systems and contrasts it with the fairness that Islamic finance aims to achieve, as guided by religious principles prohibiting interest.
• 43:30 - 48:00: Conclusion and Future Prospects In the chapter 'Conclusion and Future Prospects', the text discusses the permissibility of mutual transactions between parties, highlighting that while most transactions agreed upon by mutual consultation are considered halal (permissible), there are exceptions. Specifically, Riba (usurious interest) is highlighted as haram (prohibited) despite any agreement between the parties involved, due to its inherently exploitative nature. The discussion reflects on the flexibility allowed in business dealings and partnerships, emphasizing the prohibition of exploitative practices such as Riba even when mutually agreed upon by the parties.

LOANS, MORTGAGES & RIBA ARE MUSLIMS AT RISK? | Dr. Yasir Qadhi Transcription

• 00:00 - 00:30 she we will get directly to the point everybody's very interested in Islamic Finance but I'm going to ask a very technical question my first question to you can you please define what is from our perspective RBA and why is RBA so problematic so what is the technical definition of RBA and why is RBA so problematic according to our Shar
• 00:30 - 01:00 when it comes Toba we have different categories of RBA if you go to any classical book you read about to be honest with you it's it's very confusing for the regular common
• 01:00 - 01:30 mhm reader because the vast majority of those definitions and practical examples captured in those books do not exist nowadays MH you read for example uh exchanging wheat for barley or dat fruit for dat fruit right those examples are absolutely correct but they are very very irrelevant to our society and this is actually where the confusion is coming from for an average Muslim American who lives in this Society wants to like you know conduct transactions
• 01:30 - 02:00 according to the Sharia without being involved in RBA let me just answer the question the RBA that that we are referring to in the American society is the most severe level of RBA which is something prohibited according to all all the time which is it is it is the the it is the premium premium that has to be paid by the borrower to the lender
• 02:00 - 02:30 along with the principal amount either as a condition for the loan or for the extension of its maturity very very simple example you go to Bank of America or to Chase and you apply for $100,000 personal loan or uh investment loan or student loan whatever you know from day one that this is the loan and you have to pay it back plus certain amount right could be APR it
• 02:30 - 03:00 could be lumsum it could be flat Fe I mean whatever the formula they use might be so we have we have a a principal amount and we have Surplus or premium on top of the amount why it is problematic from a Sharia perspective when I mean this is a very good question you take a loan from the bank for example and the bank charges you let's say um 3% or 5% interest you take that money you indulge
• 03:00 - 03:30 it in a business you make profit 10 15% right you pay the principle you pay the interest and you keep the rest for yourself if everybody is happy if it is a win-win situation then why Allah subhana tala is still prohibiting RBA it's a very good question well the example that I just mentioned is just one example of different examples that do happen in the real life sometimes you make believe it or not you make not 100%
• 03:30 - 04:00 profit you make 10,000% profit it does happen in the real life and I'm responsible for what I say right it's absolutely unfair to give the bank only three or four or 5% APR or interest and you keep the rest of the profit for yourself it did happen especially like in in in March 2020 just a few days before the pandemic started you know hitting the economy in the USA that that you were unable to make profit for sure
• 04:00 - 04:30 because the whole economy actually got frozen you are unable even to maintain your your principle right you lost the principle the principal amount you know the amount that you took the loan that you took from the bank has been lost because of the economy and by the law of the land the bank is still actually can go after you and ask for the principal amount and ask for the interest on top of it so in in in both cases there is a lot of Injustice U um happen in the real life
• 04:30 - 05:00 sometimes real exploitation when the bank is not taking any risk whatsoever okay the bank actually is Shifting just putting the risk in your shoulder here is the loan you do whatever you want okay you make a profit you uh you you uh you break even you inchor loss we do not care about you here is $100,000 you bring it back next year 100 3,000 after two years 106,000 this is absolutely un unfair because the bank is not taking
• 05:00 - 05:30 any liability or responsibility or risk if you wish with the other party and this is this is why Islam actually is strictly standing against triba because of the Injustice actually implemented in the Islamic Finance system if you go to uh Islamic Chase Bank or Islamic Bank of America for example and you apply for a loan they would say well we do not have money for you we do not would not give you a loan here you are in the wrong place if you want to finance for your business let's sit down and talk with bus right you want to build a house
• 05:30 - 06:00 there is something called you want to construct a building there's something called you want some cash money to upgrade your business there's something called M so we sit down together and we discuss business and we go with a model technically called the risk sharing model versus the risk shifting model right the the the the prevailing economic Finance system is going with the with the with the shift with the
• 06:00 - 06:30 with the risk shifting model you take the money you are by your own we do not care about you okay the Islamic Finance goes with the risk sharing model we are Partners if there is any Prophet everybody enjoys the prophet if there is any L everybody will be will be losing so you see the huge difference between the Injustice implemented and happen in the real life when you go with the traditional system versus the justice and the fairness that Allah subhana T actually is calling for through the prohibition of of r so she it is can we
• 06:30 - 07:00 say therefore that even though the general rule is that any transaction the two parties agree to is halal if it is done by Mutual consultation Allah has made a specific Mutual consultation Haram even if they both agree and that is RBA and that is because RBA by its nature is exploitative can we say something like this that's absolutely correct we have a lot of flexibility when it comes to uh conducting business and and partnership uh trans action between people we have a
• 07:00 - 07:30 lot of flexibility go ahead and do whatever you want as long as you are staying away from riba as long as it is proven that no one is advancing money to somebody else and that principle and its return are guaranteed right this is actually the most fundamental component that we have to take into consideration as you know there is that has to be avoided there's uncertainty that has to be avoided but the most like you know the most prohibit and the most important
• 07:30 - 08:00 matter that we have to pay attention to is to stay away from riba which is which is a kind of exploitation and so can we also then Define riba or at least the type that we are most interested in is every loan that guarantees some type of benefit upon the lender is the type of yeah every every loan brings a stipulated benefit to the to the lender not to the borrower the lender yeah yeah the
• 08:00 - 08:30 will be counted as as RBA when we say stipulated benefit it is with the understanding that the lender actually is not taking any risk yes it's a loan it's not a business investment absolutely it is a loan loan means that you are buy by your own take the money do whatever you want I don't care about you you come back after one year you pay me the principal and the and the interest and I can't go after you by the law of the land because that is the agreement between you and I that is that is the the r Allah priv so she can you
• 08:30 - 09:00 give us some examples of riab based transactions here in America and however much time you want to spend everybody always asks about the issue of mortgages so can you summarize your position about mortgages in this so examples of riba and what do you think of the reality of the mortgage situation uh for us here in America once once we comprehend the definition of RBA the challenge that we are facing here actually is to implement that definition and to figure out
• 09:00 - 09:30 whether a certain transaction does involve Reba or not right this is the challenge that we are facing here I'll give you an example what is the difference between me offering you she Yer $5,000 loan right and and I ask you that that you have to pay me the 5,000 5,500 within one year that's a straightforward interest bearing law am I correct correct okay what if I have decided to go to Bank of America and I
• 09:30 - 10:00 opened a a saving account and based on the agreement that $5,000 has to be paid back to me 5,500 within one year what's the difference between this scenario and the other scenario technically speaking there is no difference no difference whatsoever this actually means that opening a saving account is an interest bearing loan believe it or not it's not introduced to you as an interest bearing loan but that is the name nature of the
• 10:00 - 10:30 agreement right you give your money to Bank of America your principle is guaranteed your return on on the investment which is the Reba is guaranteed by the FDIC the Federal Deposit Insurance Corporation that's actually the very confusing part that the vast majority of those transactions that we are getting involved in are not introduced to us as riba as the explicit riba that we know they are like you know introduced to you otherwise and your job as a practice Muslim is to investigate
• 10:30 - 11:00 and to unlock the secret of the agreement and find out again if someone is giving money and that money the principal amount and its return both are guaranteed that is the RBA that Allah subhana prohibited whether it is called RBA in the real life or it is called otherwise we do not care and this actually brings to our attention she the the the welln max
• 11:00 - 11:30 what matters in transactions is the essence and reality not the wording or the formality so even if the if if the charge that you are charging others or you are charged by others is introduced to you as otherwise right if it is if it is a premium that has to be paid on top of the principle that is the RBA that Allah subh prohibited and based on that based on that opening a saving account the default rule of opening a saving
• 11:30 - 12:00 account is that it is not an option because it is a straightforward interest bearing loan give another example on the real life you have only $500 in your uh in your debit card in your checking account and you stopped by any point of sale and you made a transaction of $700 usually it goes through usually it goes through okay in the bank statement of next month you will see that you have
• 12:00 - 12:30 to pay back $200 and on top of that there is $35 overdraft charge it's not r no it is overdraft Char now your job is to interpret or to unlock the secret of what happened when you when you do a transaction of $700 it means that you have taken $200 from the bank am I correct is it like a gift for you as we say in Arab no it is not right so you have to pay back the $200 if this is the only thing you need to
• 12:30 - 13:00 pay back then we get to go I mean what is the concern you borrow 200 you pay it back 200 problem here is that you pay on top of it $35 I'm just giving random numbers right that number is is introduced to you as overdraft charge well you borrow 200 and you paid it back or you have to pay it back $235 you see well that overdraft charge by default by default is the RBA that Allah subhana tala prohibited now you
• 13:00 - 13:30 can maybe prove otherwise I mean there might be some justification that there is some logistic work and and paperwork has to be done like to you know get that 200 that is very possible but the default rule is that you pay on top of the principle that you have borrowed that is the RBA that Allah subhana tala prohibited so example actually can go on on maybe now you can see the pattern you know sh let's be let me give you the opposite example how about the cash back
• 13:30 - 14:00 cash yeah cash back from the Discover card or something here you go you have a credit card right and you use it for $100 you get $5 cash back a lot of people actually say is the cash back Reba well before you jump to a conclusion you need to again unlock the secret of what happened what does it mean for you to use your credit card for purchasing it means that you are borrowing money from the credit company am I correct so you borrow 00
• 14:00 - 14:30 $1100 okay and you benefit from the $5 right so you borrow 100 and you pay it back how much 95 95 no $95 because because the cash back is $5 so 100 100 minus 5 that's 95 so you borrow 100 and you pay it back less now this is absolutely the opposite of freba we just said every loan that brings a stipulated back benefit to the lender well who is
• 14:30 - 15:00 benefiting here the lender or the borrower the borrower the borrower so the cash back actually is Hal and as always say that if you have any problem with the cash back give it to me I mean I'll more than happy this some people are happy at that aldah alhamdulillah but we didn't answer the issue of sure and and mortgage I mean I know this is very detailed but if you can just summarize your and I'm just position or yeah will will will this discuss it actually in details tomorrow in in our
• 15:00 - 15:30 seminar that's between and from 25 to 5:15 inshallah we will be having like enough time to discuss it but to uh uh briefly briefly what does it mean to to mortgage a house again you have to unlock the secret of of the transaction before you jump to a conclusion when you mortgage a house you get involved in three different transactions simultaneously there is a sale agreement
• 15:30 - 16:00 where you as a customer okay buy a house from the landlord and there is a loan agreement because of course you do not have half a million dollars to pay cash for the house so you apply for a loan from the mortgage company that's a loan agreement right and there is a mortgage agreement where the mortgage company puts a lean on the property to secure their money so three different transactions are going simultaneously say actually is mortgage according to the definition of the Quran
• 16:00 - 16:30 like it is the right of the it is absolutely the right of the lender to mortgage the property of the borrower to secure his his money so mortgage agreement is fine sale agreement is fine loan agreement is not fine because I mean you borrow half a million dollars you pay it back six or seven or even $800,000 within 30 years some people get confused they see like the name of Bank of America on on on the need of thrust thinking that oh the bank is owning the
• 16:30 - 17:00 house no wrong answer the bank actually is the lean holder of the property not the owner of the property so the bank is not owning the property bank is just putting a lean on the property to secure to secure his fund so we ended up having three different transactions two of them are Halal and one of them is Haram if you want to be like a very American Democratic guy you go with the majority right two against one so mortgage is halal here you go well in the Islamic Finance system it goes the other way around right if it is proven that one
• 17:00 - 17:30 deal is Haram within that package combination of three different transactions then the whole deal actually is ruined the whole deal actually is not you know is not H based on that the default rule of mortgaging a house in the United States according to the traditional way is not a Halal option for Muslims now the she is asking about MJ position we do have some some attempts okay by different Islamic mortgage companies who who try to offer
• 17:30 - 18:00 an Islamic alternative they're not in the same level of seriousness and diligence in applying genuine and sound Islamic mortgage options if you go to our website mja you just just Google it mja mja uh Islamic mortgage companies you will see a very long detailed declaration showing those five different major I would say Islamic mortgage companies and the status of each one of them J um let me play not Devil's Advocate because we don't do devil
• 18:00 - 18:30 advocate let me play play what do you call not Angel's Advocate let me just play the the the person who's coming with the other opinion as you are aware there are a number of academics and even Scholars they are not mainstream but that's simply because mainstream doesn't accept them as being mainstream but there are and there are academics who are arguing that and the rulings of RBA have to be rethought for fiat currency and that is for multiple reasons of them is the
• 18:30 - 19:00 inflationary nature of fiat currency and there are other reasons they bring as well that these academics would say we all agree the classical Quran is we all agree but this cash that we're using this paper currency that we're using given that it is different from uh gold and silver and that it is actually delinked from gold and silver that's one argument and then the other argument which I think is very interesting and that is that the value does not remain stagnant and a long-term loan does not retain the
• 19:00 - 19:30 same monetary value over the course of 20 years so currency by its nature is inflationary and so these group of academics some of them outright say there is no rib fat but others say that traditional F has to be rethought and we have to have a more nuanced response to the realities of modern Finance so without getting too technical what is your overall position about uh this this objection right there is a minor
• 19:30 - 20:00 one and a major one the minor one if I mean if you ask those Scholars and academics yes I mean f one does not have any intrinsic value and gold and silver do have how can you buy gold and silver nowadays you have to usein you have to use K fat money right so Fiat money actually is used to purchase gold and silver it takes the same rules of of gold and silver so all
• 20:00 - 20:30 the like re rules apply to gold and silver they do apply to fiat currency nowadays this is actually the minor issue the major issue it is it is really a fundamental one what we believe in is that loan is not a mode of Finance to start with so the inflation issue does not even exist according to our Theory okay if someone actually is approaching me asking for five ,000 to pay for the tuition fees or
• 20:30 - 21:00 the rent of his apartment or to you know whatever sagy or I mean something that's really you know necessary I'll be more than happy to give him $55,000 for maybe few weeks few months and a part of that actually is that I'm willing to take you know to take the inflation or to inchor the inflation because giving giving a loan is a is an act of devotion and charity I give it you know for the cause of Allah subhana wa tala so I'm not allowed to take any single you know
• 21:00 - 21:30 Penny on top of the principal I gave him or her $5,000 I get it back $5,000 no more and no less right now if that person actually is approaching me asking for $100,000 and I know for fact that he wants to upgrade his business right okay well even if I have the you know the $100,000 I will not give it to him I mean based or not with all due respect I give you $100,000 as a interest free loan you take my
• 21:30 - 22:00 money right as a loan okay because I do not charge interest and you are practicing Muslim like me you do not you know pay interest you take my money you invest it in your business for two three days you make tens of thousands of dollars of profit and then you come back to me after three years giving me a big hug here's your money back seriously is this a a good business of course it is not so if I want that you want my money to do business well let's sit down and talk and business we can go with the mud
• 22:00 - 22:30 right I give you the money because I know that you are the expert in the car dealership business here is the money here is the sh and the conditions and the stipulations go ahead and work on my money on my behalf whatever profit you make not profit I will take so my point here sh is that inflation is an issue when it comes to giving the loan as a mode Finance well if we disagree on the on this fundamental issue that loan is not even a mod Finance to start with then then
• 22:30 - 23:00 the inflation issue does not exist to start with fair enough yeah I mean I all I'm saying theoretically you are correct but realistically people will be taking loans for various reasons even let's say medical school for example or something of this nature where the loans do become quite large and um there there is a ha amongst the people but you are correct from a ideal perspective we should not be taking large amounts of loans for business purposes or even you go with any of those like Islamic
• 23:00 - 23:30 modes of it depends on the nature of the business that you want to finance for but loan I mean to start with is not a mod Finance period no inshallah so move on to the second to last question um we talked about RBA and back and forth let's get to the broader question can you define what makes Islamic Finance Islamic what is Islamic about our version of Islamic Finance I'll be honest here a lot of people think that it's a type of Numbers Game or word game
• 23:30 - 24:00 the and you yourself just said the ruling is we don't care about the words used we care about the maid we care about the overall and it is as if some of these Islamic mortgage companies they're taking from Fanny and fredia they're taking from the same people and they're even charging a little bit more and in reality it seems as if the contract is constructed all in their favor so what exactly makes Islamic Finance Islamic well in the same way that we have like a
• 24:00 - 24:30 Muslim family law and Muslim pain law Muslim economic you know uh system we do have an Islamic Finance system if you avoid like certain defects in the the agreement in which one of them or the most important one actually is Reba then this is by default an Islamic one and by the way I do not think it is fair enough to call it Islamic to start with you can call it a Jewish finest believe it or not you can call it a Christian finest because Allah the one who prohibited us from dealing
• 24:30 - 25:00 with interest is the same one who prohibited the Jewish Community from dealing with interest soba actually is prohibited in Christianity for fact Reba is prohibited in the abrahamic faith for fact and Judaism for fact so I do not mind at all if you call it a Jewish Finance or Christian Finance I don't not mind at all the most important thing is to make sure that you go with the just and fair and ethically respons responsible Finance now back to the
• 25:00 - 25:30 maybe mortgage Islamic mortgage companies this the you what makes it Islamic or what makes it different well if you are looking for a genuine sound 100% Islamic Finance practice in the USA with those companies who deal in the secondary Market we are wasting our time to be honest with you you won't find it I mean you cannot find it period right unless you operate offline alhamdulillah we do have a lot of attempts here in the in the US Islamic mortgage companies who
• 25:30 - 26:00 do not who do not deal in the secondary market for those who do not know what does me secondary Market Banks usually mortgage companies do not have the financial ability of waiting for you as a customer for 20 30 years to pay them back the principal they just turn around next day and they sell that contract to Freddy Mack and fidy may if it if it is worth let's say $1 million they take N9 970,000 you know dollars cash and that's it and you start
• 26:00 - 26:30 paying your money to Fredy Mack and F May again they do not have the ability in order for them to make those contracts okay salable to Freddy Mack and fidy may they have to go with the book so they all actually are Freddy Mac compliant way more than to be Sharia compliant now to be honest and fair enough with those companies they are not in the same level of diligence and dedication to implement uh an Islamic uh Finance Finance model problem here she
• 26:30 - 27:00 is that problem the fundamental problem is that the whole system is a non-islamic one so in order for you to incorporate genuine and sound Islamic Finance practice within a non-islamic finance it is close to Impossible right because of the severe incompatibility between this two differen in in the Islamic one you have to own the property you have to be liable responsible for the property you pay maintenance you pay tax you pay insurance can you take the risk of like
• 27:00 - 27:30 any increase or decrease in the market value in the traditional Finance system you cannot do any of the above so to do all the above and not to do all the above I mean it is it is impossible however however we do have some serious attempts who were able to navigate through the system and find a way that is I call it Halal enough option Halal enough Halal enough option a new fifth category Halal enough versus just just like traditional
• 27:30 - 28:00 mortgage one well I mean if you have Halal enough versus absolutely Haram which one you go with like back home we say right like you know something is better than nothing so we do have alhamdulillah some some attempts again if you go to m just Google M Islamic Warriors company you read like a very detailed declaration about those five major companies who operate in the US J it's Friday night so I'm going to conclude with one question inshallah it's it's a bit of a blunt question but
• 28:00 - 28:30 I mean I you are the person to ask this too isn't it a little bit overwhelming then like what can we do against the Global Financial market then I mean is there any hope for us Muslims impacting the system the whole world functions on riba the whole world is based on a version of capitalism that from its very Uso and fundamentals contradicts our ethos and our spirit for us giving alone is an act of worship right then and
• 28:30 - 29:00 there we change the entire Paradigm of you know the Western version of capitalism for us you know it's a Business Partnership so what can we do to affect the system I mean we're a small minority in this country and even in the globe no doubt you know Muslims are much larger but still the system is totally antithetical to us so can we as Muslims really produce a version or a product that is so solid it will inshallah supplant and replace the other
• 29:00 - 29:30 system or maybe even make a dent in it well are you talking about Muslim Muslim Muslim countries authorities who do have the ability of restructuring the finance system they're talking about Muslim minority in the US let's focus about like focus on on ourselves here well I have been in this field for for 20 years uh Yer I wholeheartedly believe that that the Muslim Community in the United States does have enough financial
• 29:30 - 30:00 resources intellectual academic human resources that are enough to establish our own Finance system in the United States W do you know that that that it is very very possible to establish a Federal Credit Union Federal Credit Union you need maybe two or3 million to establish it to register it you know accordingly and to start operating in the same way that we have a lot of ch es we have a lot of opportunities here what we are lacking
• 30:00 - 30:30 unfortunately I wish I'm wrong but this is this is the reality we are lacking a vision lack in leadership we can establish our own our own system and I'm aware of several different attempts for example Islamic mortgage companies who operate of the system they do not deal with Freddy Mac and F May whatsoever very successful yes their financial capacity is very limited but at the end of the day they produce why I mean do not just copy and paste this this uh
• 30:30 - 31:00 model and do it over and over how about establishing establishing a federal Credit un which is the alternative actually of the traditional banking system I'm aware of several LLC like different different corporations who just bring money from different investors and they work on the on the ground doing real estate business or car dealership or whatever Hal business and they're doing a wonderful job we can we can challenge the system we can on the other hand we can we can penetrate the
• 31:00 - 31:30 system if we do the necessary lobbying talking to like you know uh public officials do like doing our own we can change the system a little bit and just establish some Shar compliant you know Islamic Finance institutes in the in the United States so alhamdulillah I mean when there is a world there is a there is a way uh the problem here she is with the will with the vision with the with the leadership I tried myself and it's not a secret to establish a
• 31:30 - 32:00 federal credit union and Subhan Allah I was I was like pushed back by by several not not like you know Common Muslim no by several Scholars oh be careful she I mean this is money I mean you do not want to get involved in stay away from just educate people do not I want to like like bring Islamic Finance from the theory to the practice instead of like acting as the bad guy this is Haram and this is I want to provide an alternative when I started working on the ground
• 32:00 - 32:30 there was like a lot of you know push back from within the Muslim Community leaders that's actually the Genesis of the problem that we have otherwise the opportunities are are there I'm responsible for what I say we can do a lot alhamdulillah so inshallah there is light at the end of the tunnel and insh maybe within within our generation in we'll be able to see a viable alternative where our youth maybe even this people in the audience inall when
• 32:30 - 33:00 they grow up and it's time for them to not just get cash back but house back inshallah as well uh that there will be viable Alternatives in that's good news alhamdulillah I know you've had a flight in a long day today for uh honoring us with your presence e