Sale with the temporary exclusion of usufruct : a critical examination of its use in financing home purchases
Joint Authors
Mashal, Abd al-Bari
Hajal, Amir
Majul, Um Kulthum
Ansari, Mir Riyad
Source
ISRA International Journal of Islamic Finance
Issue
Vol. 10, Issue 1 (30 Jun. 2018), pp.85-93, 9 p.
Publisher
International Shari'ah Research Academy for Islamic Finance
Publication Date
2018-06-30
Country of Publication
Malaysia
No. of Pages
9
Main Subjects
Financial and Accounting Sciences
Abstract EN
Purpose - This paper aims to investigate sale with the temporary exclusion of usufruct, a format debated in classical Islamic jurisprudence.
More specifically, it examines the application of this sale format in the diminishing partnership arrangement used by American Finance House LA RIBA to finance house purchases.
It analyzes the Shan ah issues and assesses the risks involved.
Design/methodology/approach - The research is qualitative, surveying and critically analyzing classical fiqh literature and contemporary juristic resolutions, as well as LARIBA’s financing documents.
Finally, it systematically surveys the associated risk factors, first qualitatively, and then by quantifying them.
Findings - The research concludes that sale with the temporary exclusion of usufruct is a valid contract in Islamic law.
When the usufruct is priced at market rate, the financing arrangement is genuinely Islamic and brings added value.
Moreover, it is very effective in addressing risks for Islamic banks, particularly in countries with legal systems not designed to accommodate Islamic finance.
Originality/value - This study systematically examines all aspects of a contract that has not received sufficient academic attention, that has been underutilized by the Islamic finance industry and that is mere fitting for implementation than many of the contracts currently being used.
American Psychological Association (APA)
Mashal, Abd al-Bari& Hajal, Amir& Majul, Um Kulthum& Ansari, Mir Riyad. 2018. Sale with the temporary exclusion of usufruct : a critical examination of its use in financing home purchases. ISRA International Journal of Islamic Finance،Vol. 10, no. 1, pp.85-93.
https://search.emarefa.net/detail/BIM-965782
Modern Language Association (MLA)
Mashal, Abd al-Bari…[et al.]. Sale with the temporary exclusion of usufruct : a critical examination of its use in financing home purchases. ISRA International Journal of Islamic Finance Vol. 10, no. 1 (2018), pp.85-93.
https://search.emarefa.net/detail/BIM-965782
American Medical Association (AMA)
Mashal, Abd al-Bari& Hajal, Amir& Majul, Um Kulthum& Ansari, Mir Riyad. Sale with the temporary exclusion of usufruct : a critical examination of its use in financing home purchases. ISRA International Journal of Islamic Finance. 2018. Vol. 10, no. 1, pp.85-93.
https://search.emarefa.net/detail/BIM-965782
Data Type
Journal Articles
Language
English
Notes
Includes bibliographical references : p. 92-93
Record ID
BIM-965782