WINNIPEG - Assiniboine Credit Union is boldly going where no Canadian financial institution has gone before.
The Winnipeg-based credit union has launched the country’s first Islamic mortgage, a product designed to address Islamic law, which says paying interest on money is unacceptable and considered usury by the Qur’an.
Instead of loaning money to Muslim clients, ACU enters into a "declining partnership agreement" with them. This calls for the credit union to sell its share of the property to them over an agreed upon period of time. All the while, the family has exclusive rights to live in the home and in exchange, they agree to pay ACU a profit. At the end of the contract, the Muslim family will own the home outright.
Priscilla Boucher, vice-president of corporate social responsibility at ACU, said the new product has been in the works for four years, ever since it was approached by members of the Muslim community.
"It was an issue of financial exclusion for the Muslim community," she said.
Rather than breach their religious beliefs by taking out a traditional mortgage, the vast majority of Muslims rent out homes, townhouses or apartments.