Assalamu alaykum @Mufti_Faraz_Adam @Mufti_Billal
I came across a Islamic car financing service which claims to follows the Marhalah contract structure called ICFAL, here are the claims they make from their Q&A:
What Islamic contract is used for ICFAL’s Car Finance?
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.
What makes ICFAL Islamic?
ICFAL operates a truly unique financing model by:
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Sourcing our funds only from our members and kept in an interest-free bank account.
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Sharing in any equity profits and losses in the sale of the property in the market.
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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.
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Our profit rates are not tied to the prevailing market interest rates.
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ICFAL is a community-owned and operated organisation. The profits are not attributed to any single member or a small group of individuals.
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ICFAL simply offers a platform to bring members who would like to help other members to homeownership through a proven Islamic financing model.
If there is no interest, why am I paying additional to the amount ICFAL initially invested by the end of the contract?
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.
Would these boundaries make this Shari’ah compliant? The service has been reviewed by multiple boards and given authentication. Would really appreciate your help here as I am desperate. JazakumAllahu khayran
Here’s the website for more information^