Banks Cater to Expanding Muslim Population

Tom Ramstack, Washington Times, Jan. 23, 2006

A financial firm plans to open an office in Fairfax County in early March to sell mutual funds to the Washington area’s Muslims, joining banks and investment houses that find the growing U.S. Islamic population can no longer be ignored.

Saturna Capital Corp. plans to sell its Amana mutual funds to the Washington area’s approximately 200,000 Muslims who want to avoid violating Islamic law with their investments.

“They’re fairly young, making a lot of money, well-educated and they’re looking for services,” said Monem Salam, director of Islamic investing for Saturna Capital, which also sells funds that have no religious orientation.

The funds invest only in stocks that are Shariah-compliant, which means they cannot invest in the alcoholic beverage, gambling, pornography, tobacco or pork-processing industries.

Islamic law also forbids Muslims from paying or earning interest.

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“For the same reason we would make money on a conventional loan, we would make money on an Islamic financing situation,” said David Loundy, corporate counsel for Devon Bank, a Chicago bank that offers Shariah-compliant transactions.

One of the deals is called a murabaha transaction. The bank buys a property with its own funds, then sells it to a customer under an installment-repayment plan. The buyer gets title to the property immediately after closing on the agreement.

“It’s roughly the equivalent of a 30-year mortgage, but you’re not repaying us principal and interest,” Mr. Loundy said. “You’re simply paying us part of an installment sale.”

For Muslims, either earning or paying interest is “considered one of the greatest sins,” Mr. Loundy said.

Another financing plan, called an ijara transaction, is similar to a rent-to-own contract.

The bank buys a property and the customer pays for it, but cannot claim title to it until the full debt is paid.

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America’s newest sorority won’t be hosting toga parties anytime soon.

That’s because the girls of Gamma Gamma Chi will allow no booze, no boys and no barely-there outfits.

Membership in the country’s first Islamic sorority, rolling out at Rutgers, the Massachusetts Institute of Technology and other schools this year, requires a grade-point average of at least 3.2, prayer to Allah and observance of such sacred Ramadan practices as fasting.

Hijabs, or head scarves, however, are optional.

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