Islamic finance may have just reached a new level, with Sydney company Ijarah Finance now able to offer a suit of lending products previously unmatched in the niche finance market.
The Muslim population of Australia is estimated at 2.6% of the country, a number which jumped 15% between censuses and is only growing. Home ownership among Australian Muslims is half that of the national average, but they are just as likely to be chasing the Australian Dream of their own property.
Thus, it is a major potential growth market for mortgage brokers, albeit one that has previously been hard to break into.
They are often excluded from traditional home loan arrangements because Islam forbids usury, the practice of lending or borrowing on interest, while others struggle to get loans because a disproportionate number of Muslims are self-employed, placing them among the hardest categories to reach for brokers.
Islamic finance has been present in the Australian market for several years, but has rarely been able to offer the same suite of products that traditional lenders could: but now, one Sydney-based finance company seems to have cracked it, and are inviting brokers to work with them.
“The problem with Islamic finance in Australia, in the past, is that it has been expensive,” said Wally Ayad, Credit & Finance Advisor at Ijarah Finance. “Because of the limited amount of funding and because of the limited amount of players in the space. That’s been the problem.”
“But that’s not the case with us: people can get a rate as low as 2.3% with us, which is as cheap as a normal bank loan, if not cheaper. Additionally, people can now access non-conforming funding: we can do Low Doc, minor adverse credit, one-year financials and even commercial and rural property.—Agencies