In France, Islamic mortgage aims to offer a halal financing solution to French Muslims and non-Muslims who wish in the context of Islamic sharia to use Islamic financial products in France.
In France, halal mortgage meets the wish of the majority of borrowers in the French Muslim community to avoid paying Riba (interest rate) and adopt Islamic finance when buying a home.
Around 6 million of people are said to be Muslims in France and according to recent reports, 40% of them would be interested in and Muslims will represent 10% of the French population in 2030.
To this end, the General Directorate of the Treasury has issued tax instructions concerning the operations of Ijara, Istisna ', Murabaha and sukuks, which "will provide investors and operators with the legal and fiscal certainty that is necessary for the development of these operations. operations in France "according to Christine Lagarde. The last two operations were the most popular.
We will adapt our legal environment so that the stability and innovation of our financial centre can benefit Islamic finance ", it is by this declaration full of promises and symbols that the former Minister of Economy Christine Lagarde has hosted Islamic finance in France. A finance that can attract up to € 100 billion in investments in France and has a potential of € 4 billion in retail banking.
In France, on the one hand, French companies have not yet exploited the precious access to Islamic financing in Sharia-compliant form and, on the other hand, the Muslims of France, which constitute the largest Islamic community in the Western world. with six million people, do not yet have access to an offer of financial services in accordance with their religious principles.
In France know-how in Islamic finance is available. Thus, French banks have already expanded their Islamic financial offer but not in France. Islamic investments were noted in two French asset classes: real estate and private equity.
French Islamic finance still faces the problem of taxation. By using Murabahah, which is an instalment purchase and sale operation, structured to finance a real estate acquisition, in accordance with the principles of Sharia law, the transaction suffered from double taxation in France.
The change obtained by French taxation has made it possible to move the Murabaha contract for real estate acquisition, with maturities of up to 10 years.
Also, a first bank offers an Islamic window in France with an Islamic deposit account for individuals, and plans to open a deposit account for small and medium businesses.
Finally, Muslims living in France have the possibility to take out a halal life insurance which allows to proceed with investments of money related to Islamic sharia.
FRANCE'S ISLAMIC MORTGAGE LENDERS