Please nairalanders help out
Some marketers came to our office and marketed the financial investment company as being guided by the tenets of Islam (Non-Interest) banking. We were told that we can start savings with as low as N3,000. They also told us that they finance business projects as well but that the profit will be divided by the company and the business owner.
I want to ask is this ethical? Besides, I thought the Islamic Banking principle is only to give out loans without interest. Good people in the house, please help out.

lalasticlala, mynd44

Yes. The returns are based strictly on profit sharing and are in line with Sharia. For example, if your savings are used to establish a farm, you would get part of the profit based on how much you contributed. It is not based on interest. You can Google Murabaha for more information.

einsteine:
Yes. The returns are based strictly on profit sharing and are in line with Sharia. For example, if your savings are used to establish a farm, you would get part of the profit based on how much you contributed. It is not based on interest. You can Google Murabaha for more information.

Thank you very much Einstein for your interest in this post but what I want to know is that if they are financing the project and we share the profits, the real assets (I mean the materials for the project) then belongs to who? does it mean I will pay for it and also share profits at the same time?

The asset belongs to the investors in the proportion in which they invest. After a specified period, ownership would transfer to Lotus.

einsteine:
The asset belongs to the investors in the proportion in which they invest. After a specified period, ownership would transfer to Lotus.

God bless you Einstein. However I don't understand. Ownership transfers to them after a period of time? I don't get it as I am not that good in financial economics

aycorporat:

God bless you Einstein. However I don't understand. Ownership transfers to them after a period of time? I don't get it as I am not that good in financial economics

Marabaha investments are like lease/balance and carry. Let me use the purchase of a house as an example. Let's say, the total investment collected by Lotus is 10 million Naira. They can invest this into a building. The building can then be sold for say, 15 million Naira with 1 million Naira paid every month. The monthly payments are shared to the investors in the proportion that they invested in. After 15 months, ownership of the property transfers from the investors.

I hope you are able to at least get a grasp of it now.

einsteine:


Marabaha investments are like lease/balance and carry. Let me use the purchase of a house as an example. Let's say, the total investment collected by Lotus is 10 million Naira. They can invest this into a building. The building can then be sold for say, 15 million Naira with 1 million Naira paid every month. The monthly payments are shared to the investors in the proportion that they invested in. After 15 months, ownership of the property transfers from the investors.

I hope you are able to at least get a grasp of it now.

Thank you Einstein. More increase in knowledge for you