ABC’s of Ethical Finance

Secured By US Real Estate

Ijara CDC purchases the properties funded by the Ethical Finance Token, and leases the properties to qualified Tenants. The real estate that is purchased is based in the USA.

Security Expansion

We intend to expand the Ijara CDC portfolio to include Real Estate in Canada, England and other countries with stable real estate markets.

The ABC’s of Ethical Finance

Ethical finance is also called sustainable finance. It’s a term that takes into account several factors. It involves a transparency in the environmental, civic and social aims of any of the projects it finances.

In other words, it is about the intersection of environmental, social and financial sustainability. Investing using an ethical finance model involves a social and moral code.

Here’s why it’s an important part of a caring and compassionate society.

  • Ethical finance has different important factors like diversity and inclusion as well as working conditions and health and safety under its umbrella.
  • Ethical finance also does its part for the natural world. Other elements included concern themselves with energy efficiency, the treatment of waste and climate change.
  • The governance aspect includes items like board transparency and independence. Just as important are shareholder rights and relationships with stakeholders as well has controls on corruption, bribery and political lobbying.

Here’s a few examples of the kind of products involved.

  • Socially financed projects that include programs designed to help with employment or improve user access to affordable housing or essential services. Most recently, short to medium ethical finance is beginning to address issues resulting from the pandemic.
  • Ethical finance also covers what are called green loans. This is where money is made available for projects with environmental benefits like renewable energy. Ijara CDC has successfully restructured Solar home projects and can work with almost any Solar provider such as Homeland Power, Powerhome Solar, Tesla Solar Roof or Panels, etc.

The idea also works for people looking for a socially responsible bank loan. For example, if you’re looking for an ethical product when you’re choosing a mortgage, you should tick a few boxes.

A Just Society

For example, ask yourself if the institution you’re looking to do business with is building a just society. Find out if there involved in damaging industries like fossil fuels, mining and nuclear weapons. You should also steer clear of any institutions that are making investments in other industries like the tar sands and fracking industry.

When you go through this checklist, you’ll see that Islamic finance is a clear choice. For starters, the whole principle rests on the notion that money should have no intrinsic value of its own. Read on to find out what that means if you’re looking for a home loan.

Ethical Finance and Islamic Home loans

Islamic home loans are considered halal for several reasons including the fact they forbid the payment of interest. This allows these products to fall under the ethical finance umbrella.

There are several different types of Islamic mortgages. One of the more common ones is called a Home Purchase Plan (HPP).

A Certain Percentage

Under one of these socially responsible and sharia compliant contracts, the consumer buys a certain percentage of the property via a Option to Purchase. The company purchases the rest. The consumer pays rent on the portion owned by the company.

Gradually, the consumer owns the entire property. Because the transactions are made through rent and not interest, they are considered both halal and ethical. This is essentially a rent to own model which provides a virtuous path to home ownership, this should not be confused with some rent to own schemes that yield exorbitant profits for the Landlords/Financiers.

A Step Further

In a traditional HPP plan, if the tenant walks away, they lose everything they have paid in. In the Ethical Ijara model, a tenant can walk away from their equity and hold on to their equity tokens, this make the ETHi – IJA model a much fairer and more principled approach to traditional lease to own financing or traditional mortgage financing.