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Ansar Personal Loans Ltd
AHL
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Why are Interest bearing transactions (Usury) forbidden in Islam, Christianity and Judaism?
The taking of interest implies taking over somebody else's property without giving anything in exchange, because one who lends one pound and gets two back gets an extra pound for nothing.
Dependence on interest prevents people from working to earn money, since the person with the pound can earn an extra pound through interest, either in advance or at a later date, without working for it. The value of labour will be reduced in the sight of this person. Why should he take the trouble of running a business or risking his money in trade or industry if he can interest more easily? By this means, interest may deprive the people of the benefits that would otherwise arise from money being invested into useful production and services.
Interest requires the needy person to pay back more than he has borrowed thereby increasing the wealth of rich lender and decreasing the wealth of the poor borrower. In desperate situations the lender can exploit the weakness of the poor, giving rise to feelings of envy and hatred among the poor towards the rich, and contempt and callousness among the rich toward the poor. Interest can thereby discourage people from doing good towards one another. It may go so far as to destroy the very fabric of human love, brotherhood, fellow-feeling and undermine the welfare and happiness of human society.
Qur'anic verses leave no doubt as to the command forbidding interest related transactions. In some Muslim countries interest related business and transactions are punishable offences. Even non-Muslims in an Islamic state are not permitted to conduct such business. For example, the Christians of Najran were told that if they continued to deal in interest the agreement with them will be considered void and their action an act of belligerency.
Ibn Abbas and others go as far as saying that in an Islamic State people who persist in interest related transactions should be put to death. Other jurists consider prison as sufficient punishment till they renounce and stop their actions.
Hadith: "Wish for your brother what you wish for yourself"
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What is APL?
If you are a Muslim then you will be keen to avoid interest whenever you can. Until now there has not been any one to help you along that route, even in a small way.
The religious condemnation of interest be it on personal, business loans or on mortgages has made it vital that a facility is created that will allow interest free loans to be made available.
Many brothers and sisters face financial hardships and are forced to take bank loans involving interest or alternately resort to borrowing from friends. This in turn puts a financial burden on their friends and an emotional burden on their friendship.
In the vast majority of cases many who borrow from their friends often find they are unable to pay back the loan when promised, causing a strain on all concerned. The trouble is that most people try to pay back all in one go.
And as anyone who has borrowed knows, this is extremely difficult to do, because all too frequently the small amount saved needs to be spent when something unexpected happens. The promise to pay back in one year gets put off to two years then three years and sometimes much longer. Therefore it is vital that a facility is set up which organises the loan ensures that repayments are made regularly and efficiently. Hence the formation of APL.
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Is there a need for APL?
If a friend came to you and asked to borrow £2000 would you lend it to him? If yes then would you lend to a second friend that asked and then a third and a fourth? Of course you will not be able to lend to everyone even if you wanted to. Besides this lack of money not everyone has friends or relatives who have spare cash to lend to even one person.
Some people think that if you don't have then you should not spend and so the question of borrowing should never arise. However, this is too idealistic because it is not simply extravagance that forces people to borrow. In many cases people have genuine reason to borrow. For example, if an accident occurs to your car or property where it is important to deal with it quickly and not enough saving is around to meet the required cost, if an emergency trip abroad is needed, if a job has been lost and a person wants to start up in business requiring funds, or if a person is working but would like to buy a house and does not have £50,000 in cash to make a deposit.
Some people say that it is acceptable to deal with banks and building societies for mortgage because we are living in a non-Muslim country. Whether it is acceptable or not we think that everyone will agree that if it can be avoided then it is best. But how can it be avoided if an alternative does not exist? Precisely the point! Let us establish an alternative and avoid the problem. Muslims have already solved other problems, which needed solutions. For example, halal food was needed so it was made available, congregational prayer was to be performed, so mosques were built, women needed medical treatment so female doctors were found, children needed Islamic teaching so madarassas and Muslim schools were established. If Islamic finance facilities are not provided, then people will continue to use the next best thing, which in all these cases will mean some involvement with interest.
As the mosques will be used by Muslims now and in the future and so be a source of Ajar (reward from Allah). Interest-free loan facilities too will be used by Muslims now and in the future and hence also be a source of ajar for those who help to set up this vital and urgently needed facility.
If Ansar Finance can help to alleviate this problem from our lives then it will be one more step towards complying with the commandments of Allah and the teachings of His Prophet Muhammad (pbuh). So be a part of this important and exciting project for the Muslim Community.
REMEMBER THIS IS A SADAQA JAARIYYA AS LONG AS OTHER PEOPLE BENEFIT FROM THE FACILITY WE HELPED TO SET UP.
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What is the need for AHL?
Housing is one of the basic needs of human beings, and everyone desires to secure shelter for his family house has always been and still is a source of family pride and financial security. Due to the steady increase in house prices, it has become impossible for individuals and young families to come up with a substantial amount in cash to buy a house. The thoughts of saving money now to buy later scares many people when they realise that their savings will never be able to catch up with the increase in house prices. With no adequate interest-free house financing alternatives available, many Muslims are forced to follow non-
Muslims in obtaining riba-based financing from conventional financial institutions in non-Muslim countries as well as, unfortunately, in many Muslim countries.
As a result of colonisation of Muslim countries there were hardly any alternate sources of financing available to Muslims. Most of the alternatives were limited to the books written by some Muslim scholars with some knowledge of Shari'ah and modern economics. There was no practical model available anywhere in the Muslim countries that could meet all the challenges of modern business, trade, commercial and economic practices, which could also operate within the prevailing taxation and legal framework.
Unfortunately, for the last 30 years the Muslims in this part of the world have been facing the dilemma of whether to buy a house and indulge in interest or forget about buying a house altogether. Some of us were led to believe that since we have no alternative it is acceptable to pay interest in this part of the world. Yet others, although well settled economically, still hold the view that no matter what indulging in interest is one of the forms of riba and that this has been forbidden by Allah (Subhanahu Wa Ta'ala).
Alhamdulillah, due to the genuine concern and dedicated efforts of various groups of Muslims, a number of alternative financing systems have been developed and various housing projects ranging from the small to the large have been started. One particular model has been developed in Canada to accommodate a large number of Muslims scattered all over the country. Ansar Finance Group is adopting the same model, with modifications to suit the Muslims in Britain, and it will operate under the name of AHL.
Moreover, in this project, we can tackle another important Islamic issue with which we are faced, namely interest. Almost all of us have some savings, ranging from for a short period of a few months to a few years, and in various amounts, for different predetermined purposes and/or unknown contingencies. We do not like to put these savings in the bank and collect interest because that is haram. At the same time, it troubles us to see that neither we personally are benefiting, nor any other Muslim is being helped with this money. Rather, the big banks take advantage of the funds for their own purposes and on top of all this our money loses its value due to inflation.
Only Members of the Ansar Foundation Ltd. may own shares in AHL. By putting all of these small savings in investment through some systematic channel such as the AHL. every Ansar member will benefit. Therefore, this project provides us an opportunity to invest our savings for any period of time and earn Halal income.
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How does AHL Work?
 Diminishing Musharakah Sheme
Increased Ownership - Decreasing Rent
An Ansar member wishing to buy a house or re-finance his existing interest-based mortgage is required first to invest his savings (buy shares) in Ansar Housing Limited ("AHL") for a certain length of time. Afterwards, upon fulfilling all the application requirements of the institution, he may locate and negotiate the purchase of a house with financial support from AHL
under its diminishing musharakah contract.
AHL pays cash for the house and obtains legal title in its name. At this time the client transfers his investment in the institution to this house and becomes a co-owner. This process forms a partnership (Mudhaarabah) relationship with the institution and the individual.
This partnership leases the house to the client at an agreed rent. According to the terms of the agreement between partners, the client may purchase extra ownership shares in the house at future dates and thereby in due course come to own the property in its entirety. The price of ownership shares is calculated by reference to the market value of the property. AHL will receive a specified percentage of any increase in property price but will share falls in property price according to its ownership share at the time the extra share purchase is made. Legal title of the house is transferred to the client upon his or her purchase of the final ownership unit.
During the term of this partnership the client pays rent for living in the house in proportion to the share ownership of the house. The institution's share of the rent goes to AHL and the client receives (back) his own share.
The client is responsible for paying for repairs and maintenance. Some expenses of a capital nature are shared in a previously agreed ratio between the partners.
This model is most equitable and fair since both parties share the fluctuation (up or down) in the value of the property in a predetermined ratio. There is no prefixed time limit for increasing share ownership, thus providing maximum flexibility to the client. At the same time the client enjoys immediate savings in the rental payment in proportion to his increasing investment in the house.
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How can I buy Preference Shares in AHL?
Download Application form here
Preference shares in AHL can be purchased in any quantity or in units of £100 each. A standing order facility is available if you wish to make regular payments to AHL. Payments smaller than £100 are also acceptable, as installment payment towards the purchase of shares. Upon completing the first £100 payment, one share will be allocated but the share certificate will only be issued once an amount of £500 has been reached and you have acquired 5 Shares.
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What are the Future Prospects of AHL?
AHL is a long-term project. It recognises that many afg Members will not be contemplating purchasing a house in the short term. AHL also caters for those wishing to purchase a house in the future. When a conscious decision to buy a house is made there is a tendency to begin to save for the big move. We therefore invite and encourage afg Members to invest their savings in AHL. Needless to say all savings invested can be topped up whenever the individual wishes to do so.
The savings invested will receive a return at the year-end. The flexibility of the project allows any investment to be used as a deposit on a property that you wish to purchase.
By using the AHL scheme, you will be able to purchase your future home without interest. A simple formula and one that is Islamically approved.
And if in your lifetime it is not possible to save the minimum deposit required to buy a property with the help of AHL, your savings can be transferred to your children to enable them to build upon the foundations laid by yourself.
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What happens if I choose to sell the property before all the monies have been paid to AHL?
The house can be sold as normal. Preference will be given to another member before outside parties. AHL will extract the balance of the amount owed to them from the proceeds.
Any legal costs will be the responsibility of the house seller, not AHL. Remember this is a community based project and advantages of the scheme are weighed in your favour.
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What happens if my circumstances change and I am unable to maintain the payments to AHL?
AHL should be notified of any change in circumstances resulting in hardship.
AHL will sympathetically listen to any member suffering hardship. An alternative schedule of payments will be designed which is suitable and acceptable to house occupier and AHL. We would urge any house occupier suffering a change in circumstances to contact AHL urgently as a matter of priority. Similar terms apply in the event of sickness or death.
The project is community based and AHL will strive to help anyone suffering a misfortune.
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What happens if I have a complaint?
A complaints procedure has been drawn up which AHL believes will resolve any dispute or compliant. The complaints procedure is documented in the detailed "Rules & Regulations". This should be followed in all circumstances with legal proceedings always left to the last resort.
We would urge all potential property buying clients and investors to read and understand all rules, policies, procedures and regulations of AHL before entering into a contract.
All transactions between AHL and other parties are conducted through the services of a solicitor.
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