Islamic home financing in New Zealand as an alternative to interest mortgage

Hamilton businessman Abdullahi Dayib, has set up his own company, Al-Haramain Islamic Finance, to offer New Zealand's first Islamic "mortgages".

He is a Muslim, whose religion bars conventional borrowing with interest payments, the Wall Street Journal reports.

Mr Dayib, who is Somali-born, said shariah, or Islamic law, deemed the payment or receipt of interest - known as riba - akin to usury.

As a matter of faith, a Muslim cannot lend money to, or receive money from someone and expect to benefit - interest (known as riba) is not allowed. To make money from money is forbidden - wealth can only be generated through legitimate trade and investment in assets. Islamic investment funds are also banned from investing in companies associated with tobacco, alcohol or gambling.

"We Muslims have a lot of banks willing to lend money, but we can't just go into banks and borrow," said Mr Dayib, a New Zealand citizen.

He is now waiting for his mortgage product to be approved by Islamic clerics so he can start offering it to New Zealand's 36,000 Muslims who, he says, have been held back by their inability to raise cash like other New Zealanders.

From New Zealand Herald and Wall Street Journal.