Islamic financing for housing acquisition will be more beneficial than mortgage crediting
Astana. November 7. KazTAG - Islamic financing on housing acquisition will be more beneficial for Kazakhstani people than traditional mortgage crediting, said Yerlan Baidaulet, chairman of association of Islamic financing development.
"In the Islamic banking the profit comes from so called real added cost. Any goods are sold and resold. It is a real added cost on goods which has been agreed with all the sides of the process and transaction, it is a fair position. In the case with usual banks it work as follows: usual banks get not the real added cost, they get monetary added cost, thus, they get money, you know," he said.
He referred to an example of the difference in interest fees.
"For example a flat costs $100 000. You plan buying this flat with such institute. This institute or company buys it and agrees their interest with you, that is you define it with a client. It means they cannot get from you more than you can pay," he said. "Thus, you pay by the results of the year, you may reduce the term yourself, for example, you may pay 100 000 plus the agreed interest, for example 10%- 110 000 during 5 years. In the case with banks, you know, it may reach 100% of monetary added cost on the credit," he added.