The land down under is currently in the clutches of one of the worst economic slowdowns. Based on reports by the Treasurer of Australia, Josh Frydenberg, Australia is currently at its lowest economic point since the year 2009.

Economic growth stands at 1.8%. With GDP in the negative, people across the country are struggling to make ends meet. The predominant reason for this situation is the non-performance of the residential construction industry and Australian consumers’ unwillingness to spend on anything that is non-essential. Experts believe that a decline in average household income is the actual culprit for the slowdown.

Government insiders believe that if things don’t change soon, Australia may experience a very severe recession in 2020, bringing to an end the 28-year long golden economic period.

The role of Islamic finance in gaining economic stability

Islamic finance works on very charitable and investor-friendly laws, which protect investors from the ill effects of a recession. The objective of Islamic finance is to help investors:

  • Create personal wealth
  • Find well-paying jobs
  • Purchase homes
  • Gain financial freedom

All accounts, funds, shares and bonds that Islamic finance institutions provide help investors put their limited resources to good use and make significant improvements to their quality of life.


5 reasons investors should choose Islamic finance

All investments are Sharia-compliant

There are very few Sharia-compliant financing options available in mainstream finance. This has become very problematic for many people. With Islamic finance, you can seek Sharia-compliant investments and never compromise on your beliefs and your financial needs.

Institutions offering Islamic finance work independent of the central bank

The Reserve Bank of Australia (RBA) is the central monetary issuing authority of the country. It is the RBA that determines the prevailing interest rates and returns for all commercial banks. Typically, the central bank organizes the Open Market Operations – which is a type of auction where they buy/sell cash at a particular rate of interest. The commercial banks which bid the highest, are given the most cash. In order to recover the interests paid to the central bank, commercial banks charge their consumer’s a higher rate of interest than they paid to the RBA.

On the other hand, Islamic finance institutions don’t work with the Central Bank for cash. According to Sharia law, banks cannot use their money to generate more money. Anything earned by them should be a result of some good, ethical service that the bank has provided. Since all investment projects are selected only after evaluating whether they fit the institution’s core beliefs, investors and borrowers are never burdened with abnormal interest rates and low returns.

All investments are transparent, rule-abiding and ethical

Traditional financing is often subject to a lot of speculation, bidding and other events. This is predominantly done with the intent to reduce the bank’s expenditures and obligations towards their borrowers/investors. Another thing banks do to reduce their financial burden – invest in sectors that certainly yield higher returns, but which are also morally corrupt.


Islamic finance, on the other hand, is ethical in terms of its operations. Islamic financing rejects the processes of bidding, speculation and high interest. This makes the entire funding process more transparent and honest. Additionally, according to Sharia law, Islamic financing institutions are prohibited from funding a venture that doesn’t meet Sharia ethical sensibilities. Finally, according to Sharia law, investors must be informed about all the risks associated with their money and about the interests and returns associated with their borrowed funds. This keeps the institution responsible for its members.

So, you can rest assured that your finances and your investments come from (or are going to) good causes.

Islamic bonds can be indexed by anyone across the world

The best advantage of Islamic finance is that today, all Islamic bonds, shares and mutual funds are accepted by various leading financial agencies and rating companies. They are included in the stock markets of many countries, and their performance can be tracked from anywhere across the world.


Even non-Islamic investors are eligible for Islamic financing

Finally, Islamic finance isn’t just restricted to people who follow Islam. Anyone, from any religion and with a just cause, can seek Islamic Finance products.

Joining ICFAL can give you excellent financial stability

The Islamic Co-operative Finance Australia Ltd. (ICFAL) is a leading Islamic finance organization based out of Australia. The establishment is a 100% member-funded initiative, which already has over AUD $34 million in assets under management.

If you’re looking for quality, safe and ethical funds, ICFAL is the way to go.

Advantages that ICFAL members enjoy

Members have the advantage of getting finance without interest

ICFAL actively supports its members through finance and investment assistance. Just like other Islamic financial institutions, ICFAL does not follow the operational methodology of the Central Bank or the strategies of loan aggregators in Australia. Additionally, ICFAL makes its earnings from the profits it gets from its shares and the rental payments derived from members. This ensures that they don’t need to collect interest from their members for loans.


ICFAL contributes to the members’ property expenses

One of ICFAL’s main goals is to assist members in their homeownership dreams. This is why they contribute to the fixed utility expenses of their members’ homes (fixed costs). These costs include strata/council rates, fixed part of the water supply bill, etc. This significantly reduces the members’ housing expenses.

Financial risks are evenly distributed between ICFAL and the member

The Mushaarakah financing process of the ICFAL takes a long-term view of property-related losses. This is why they’re willing to bear any losses that arise out of property investment, provided the losses are outside the control of all involved. (*Conditions apply. Please call ICFAL for clarification)

End-to-end share administration is taken care of by the ICFAL

ICFAL has a team of highly-trained professionals, who actively manage and monitor the performance of the Co-operative. This ensures that members benefit from the skill and knowledge of experts.

Members can tap into an expansive range of products

Members of ICFAL benefit from access to a wide selection of products and accounts, ranging from Home and Car finance to Self-Managed Super Fund accounts. Irrespective of what financial requirements or constraints they have, members can rest assured that ICFAL will support them financially. After all, generous and unbiased financial support is their motto.


Some products ICFAL members have access to:

Property finance

Also known as the Diminishing Mushaarakah, this property finance aims to help members get the money they need to buy a property of their choice. Members get to have shared ownership of the house with the ICFAL.

The best part is that once the ICFAL recovers the principal they contributed at the time of home purchase, they transfer full ownership of the property to the member. No interest rates are charged.

Children’s Education Fund

The perfect account for people with children, the CEF is designed to provide monetary support for children’s education after they turn 18. Members can start the funding and run it until their child is 18 years old. Parents can redeem these shares at any point they want. If not redeemed, the shares’ ownership passes to their child once they are of legal age.

This fund is one of the ways parents can ensure that their children are eligible for ICFAL membership as adults.


Super Fund

A long-term investment opportunity offered by ICFAL is via your Self-Managed Super Fund (SMSF). Through ICFAL you can make Super returns the halal way by placing your funds with us.


ICFAL invests your money according to Islamic Shariah law. When we talk about Shariah approved investments, it means ICFAL actively avoids investments in industries such as gambling, alcohol, tobacco, weaponry and interest-earning organizations. Our motto for SMSF is that all Australian Muslims should protect and invest their retirement wealth without compromising their Islamic core values.

Islamic Finance is becoming an important part of emerging economies around the world. The growth of the Muslim population in Australia can be an engine of further prosperity while investing their money in proper ways and ICFAL can be of tremendous help to support them as we all are aiming towards better living without compromising on our core faith in Allah (swt).





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