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Two aspects that differentiate Hejaz Islamic Finance from other Islamic Finance providers

There are 2 main aspects that set Hejaz apart from a conventional lender and other Islamic Finance providers. These are - Source of Funding and Ijarah (Shared Equity Rental) based contract.


Source of Funding

  1. Our core business at Hejaz is Asset Management – Managing Superannuation and Investments for our clients in a Shariah compliant manner. Being an Asset Manager allows us to uniquely structure our Islamic Finance offering, such that funding is sourced from Investment pools rather than interest bearing means. Essentially, we are non-bank funded. This makes our offering truly Sharia-compliant and unique in the Australian Islamic Finance industry.
  2. Being a non-bank financier, we use a series of metrics to set the Ijarah Finance rate. We consider the expected rate of return to investors (those whose funds are utilized for the funding of mortgages). The rates are set at a level which is competitive and palatable for both borrowers and investors.


Ijara based contract (shared equity rental)

  1. Our contractual agreement is based on an Islamic Model known as Ijarah (shared equity rental). With this model, the title of the property is kept under your name with each repayment consisting of two components:
    Rental - for the use of the financiers' share of equity in the property
    Principal – equity buy-back to acquire our share of equity in the property.
  2. As you acquire more equity in the property, the rental component decreases, and the equity component increases until the property is purchased outright, or you sell/refinance.
  3. Should you wish to sell the property at any given time and do so at a profit, Hejaz will not indulge in the profits of the sale and will only require payment of the outstanding principal component of the finance facility.
  4. This is not to be confused with the Musharaka model (partnership) which entails both parties entering a co-ownership agreement – Sharing of ownership, expenditure, and profit/loss.It is worth noting that while many countries apply this Musharaka model, the specifics of the model do not fit well with the current finance regulations in Australia and tends to not work in the client’s best interest.