ICFAL operates a truly unique financing model by:
1. Sourcing our funds only from our members and kept in an interest-free bank account.
2. Sharing in any equity profits and losses in the sale of the property in the market.
3. Allowing for the rent and profits paid under our Musharaka financing model to be based on the actual rent and property prices using an independent valuer.
4. Our profit rates are not tied to the prevailing market interest rates.
5. ICFAL is a community-owned and operated organisation. The profits are not attributed to any single member or a small group of individuals.
6. ICFAL simply offers a platform to bring members who would like to help other members to homeownership through a proven Islamic financing model.
We believe these factors make us substantially different from other financing models.
Our Car finance contracts are based on Murabaha (cost-plus financing). We share partnership with the member in purchasing the vehicle and sell our share to them over a period of time.
Over time, the member pays rent on ICFAL’s share of the car. This rent amount will reduce with each additional share purchase the member makes.
We believe there are true Islamic financing alternatives available. In particular, our model of Home Financing is significantly different from the market that many of our legal, regulatory and compliance partners recognise our unique Musharakah model as substantially different from a standard principal and interest model.
The payments made to a bank in a conventional finance system is based on repayment of money with no relationship to the vehicle. The bank lends a customer a certain amount of money and expects a certain amount of money in return for the money they lent out.
The payments made to ICFAL are based on the concept of trading and reflects the real-world return on the investment. Payments are dependent on 3 components: Rent, Share Purchase, and Profit on Share Purchase.
Paying more does not mean you are paying interest. The money that ICFAL makes is derived from rental payments and profit made on ICFALs shareholding. Most of the profit that ICFAL derives over the term of its finance contracts is in the form of rental payments.