Arlington, VA, United States (AHN) – Mortgage rates fell to new lows again for the week ended May 10, with the 30-year averaging 3.83 percent.

Freddie Mac said in a statement Thursday, “Following April’s weaker than expected employment report and the French and Greek election results raising concerns over the stability of the eurozone, long-term Treasury bond yields declined, allowing fixed mortgage rates to ease to new all-time lows this week.”

The rate for the 30-year averaged 3.84 percent in the prior week and 4.63 percent in the same period a year ago.

Rates on the 15-year fixed mortgage averaged 3.05 percent in the latest week, down from 3.07 percent last week and 3.82 percent a year ago.

According to Freddie Mac, average interest rates on five-year Treasury indexed hybrid adjustable mortgages averaged 2.81 percent, down from 2.85 percent last week and 3.41 percent from a year ago.

Rates for 30-year conforming mortgages also fell to a record low in the Mortgage Bankers Association weekly survey released Wednesday.

The MBA also reported that mortgage applications increased 1.7 percent in the current period, a hopeful sign for the ailing housing market.

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Arlington, VA, United States (AHN) – Mortgage rates in the U.S. have fallen to a record low-again.

The average rate for 30-year fixed loan slipped to 3.84 percent for the week ending May 3, down from 3.88 percent in theor week. It is the lowest ever for the 30-year since mortgage giant Freddie Mac started tracking rates in 1971.

The average rate for the 15-year dipped to 3.07 percent from 3.12 percent.

Lower interest rates will provide some cushion and support for the struggling housing market, but unfortunately, the U.S. economic recovery appears to be stalling, and that does not provide the confidence consumers want to take on the obligation of purchasing a home.

The Census Bureau reported earlier this week that homeownership in the U.S. dropped to the lowest level in 15 years, sliding to 65.4 percent in the first quarter of 2012, down from 66 percent in the previous quarter.

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Arlington, VA, United States (AHN) – Mortgage rates in the U.S. have fallen to a record low-again.

The average rate for 30-year fixed loan slipped to 3.84 percent for the week ending May 3, down from 3.88 percent in theor week. It is the lowest ever for the 30-year since mortgage giant Freddie Mac started tracking rates in 1971.

The average rate for the 15-year dipped to 3.07 percent from 3.12 percent.

Lower interest rates will provide some cushion and support for the struggling housing market, but unfortunately, the U.S. economic recovery appears to be stalling, and that does not provide the confidence consumers want to take on the obligation of purchasing a home.

The Census Bureau reported earlier this week that homeownership in the U.S. dropped to the lowest level in 15 years, sliding to 65.4 percent in the first quarter of 2012, down from 66 percent in the previous quarter.

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Kathmandu, Nepal (AHN) – Japan has agreed to provide financial support of ¥250 million (approximately $3 million) to Nepal as food aid.

Narayan Kaji Shrestha, Nepal’s deputy prime minister and minister for foreign affairs, and Koichiro Gemba, Japan’s foreign minister, witnessed the signing of the deal Sunday at the Ministry of Foreign Affairs.

“The grant is extended for procuring the items necessary to increase food production in Nepal with special emphasis on underprivileged farmers,” read a statement issued by the Japanese embassy.

Japan has been extending grant assistance for the increase of food production to Nepal since 1977, one of the oldest grant programs from Japan to Nepal. The last such grant was extended in 2009 in the amount of ¥490 million.

Japan has also agreed to provide support for Nepal’s IT initiative by the election commission. The assistance includes training on XenServer management, PostgreSQL database management and information security.

Earlier, Japan also provided internet servers for 25 strategic district election commissions.

During the talks, Nepal sought Japanese assistance for the construction of the Upper Seti hydropower project, said Lal Sankar Ghimire, foreign aid division chief at the Finance Ministry.

Nepal also asked for Japanese assistance to build a new hydropower storage project, a hospital for the treatment of serious injuries, modernisation of Tribhuvan International Airport, development of the Madhya Pahadi Lokmarga and resumption of a loan that Japan had stopped in 2004, among other topics, added Ghimire.

“Japan has assured us it would continue its support from education to infrastructural development, and would do the same in the days ahead,” Shrestha said at a news conference after the completion of the visit.

This was the first visit by a Japanese foreign minister in 35 years.

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Washington, D.C., United States (AHN) – The Federal Reserve, as widely expected, left interest rates unchanged at a meeting of its policy meeting Wednesday, and it reiterated the central bank’s stance of keeping rates at “exceptionally low levels if needed” through late 2014.

The Fed also maintained it will continue bond market moves to switch to longer maturity mortgage backed securities and government agency debt from bonds that come due sooner.

That will continue to pump money into the struggling economy, a current policy that has helped steady the ailing housing and mortgage markets since the fall of 2011.

The Fed meeting comes on the heels of mixed signals in recent weeks which show improvement in some key areas and disappointing readings in others.

Unemployment claims have ticked up, job growth has waned and durable goods orders remain week.

The Fed was expected to leave rates at near zero levels, but many investors were hoping for a stimulating fresh round of bond purchases which failed to materialize.

Markets, enjoying a strong rally before the announcement mid-day Wednesday, held onto early gains.

Just after 1 p.m. on Wall Street, the Dow was up 77 points, the S&P 500 was higher by 16 points and the NASDAQ climbed 62 points, helped by stellar earnings from Apple.

 

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Gaza, Palestinian Territory (IRIN) – The demand for microloans has risen steeply in the West Bank and Gaza Strip in recent years, according to data from the Palestinian Network for Small and Microfinance (Sharakeh), which represents 11 microfinance non-profit institutions whose total loan portfolio was US$75 million by the end of 2011.

Between 2007 and 2011, the number of active microloans in the West Bank and Gaza Strip rose from 20,000 to more than 43,000. This trend is likely to continue, said Sharakeh, predicting that by 2015 the number of loans will reach 77,000. The number of active clients receiving loans from microfinance institutions has grown by an average of 27 percent annually since 2007, he added.

“Microfinance is on the rise in Palestine because it serves small businesses which are growing in number and importance,” Shireen al-Ahmad, a division chief at the Palestine Monetary Authority (PMA), told IRIN. Trying to start a small business is one way to cope with the challenges of public sector employment – but it can be a precarious existence given the state of the Palestinian economy.

Demand for microcredit, designed for borrowers who typically lack collateral, steady employment and a verifiable credit history, has spread by word of mouth, said Alaa Abu Halawa, programme coordinator at Sharakeh, adding: “The people realized the benefit of microfinance. And its growing importance is attracting more investors.”

Besides being promoted as a tool for providing the poor with financial access, microloans in the occupied Palestinian territory (oPt) have become an attractive alternative to normal credit from banks for any small businesses, say Palestinian microfinance institutions.

“Banks require high collateral and complicated loan procedures. We don’t,” Sameer Kraishi, a microcredit manager at the Arab Centre for Agricultural Development (ACAD), told IRIN. “The Palestinian case is special…Our microloans are high compared to developing countries like India, usually about $5,000.”

During his work for ACAD, Kraishi has seen many Palestinians who successfully built up their business with the help of microloans. But equally, he has seen many of them fail. The persistent financial crisis of the aid-dependent Palestinian Authority (PA) and the resulting impacts on the general West Bank economy affect small businesses heavily, he said.

Lack of donor support

According to the PA senior official Ghassan Khatib, the PA’s salaries were once again delayed for several days this month. “The PA cannot fulfil its payment obligations because of a lack in foreign funding. The outlook for this year does not look good,” he told IRIN.

One of the reasons why economic growth in the West Bank slowed down in 2011 was foreign donors’ failure to provide sufficient support to the PA, the World Bank said in a recent report. In 2011, the PA required $1.5 billion in budget support, but eventually only received about $814 million. The budget for 2012 is expected to have a recurrent budget deficit of around $1.1 billion.

“Economic deterioration is a main reason for a rise in microfinance, which together with the PA financial crisis resulted in high unemployment and increased the poverty rate. This, in turn, lead people to look for private projects to earn their living,” said Sharakeh’s Halawa.

But small businesses are dependent on the spending of government employees. “When salaries are cut, the demand for goods and services goes down,” Samer Barghouti, general manager at ACAD, told IRIN, adding: “As a result, our clients often face difficulties paying back their microloans, and this creates risks for them, but also for us, as an institution.”

Failure never far away

One of ACAD’s clients hit by the economic slowdown is 43-year-old Mahmud al-Haj, a vegetable seller in Ramallah’s central market.

“Over the last year, I have made less and less profit. Many of my customers are PA employees. They just don’t have enough money when their salaries come too late, so they simply stop buying,” he told IRIN.

Some years ago he had made the equivalent of about $1,600 per month, now his monthly profit barely exceeds $500. He had borrowed US$3,000.

“I hardly sell 200kg of vegetables a month,” he said, adding: “I fear that once the loan is used up, I will not be able to continue. I need to pay taxes to the municipality. I have to take care of my family. I need to pay for my children’s school, for electricity, food, and haven’t even paid back most of the loan I took.”

Almost half of micro-loan projects fail in one way or another, according to Shaker Saadeh, manager of ACAD’s Ramallah field office.

“Many of our clients used to be unskilled labourers in Israel, never acquiring the knowledge necessary to run a business. Others use microloans as a means to change profession, like a carpenter who suddenly starts an agricultural business, but doesn’t really know how to do it,” he added.

Sewing

“Over the last seven years I received 15 microloans from different organizations. I used to be a wage worker, but eventually opened my own sewing workshop,” 48-year-old Na’ma Shamali said, while pulling fabric through a sewing machine in her shop in Ramallah.

Her current loan amounts to $3,000, but past experience has taught her to invest the borrowed money wisely. “At the beginning of every month I set my priorities. What do I really need? So recently I bought a new automatic sewing machine for 9,000 shekels [$2,400]. But at the beginning of every month, I pressure myself to work a lot, so I can pay back the loan,” she said.

Thanks to the growth of her business, she and her husband were able to buy the house they previously rented and send their children to a private school. “I am making 5,000 shekels [$1,320] of profit [per month] today. I am satisfied.”

Whether microfinance provides a mechanism for women’s empowerment beyond mere financial success has been widely debated in the past.

Gender issue

In oPt, real empowerment is often hindered by the traditional roles women are assigned to, said Nisreen Swelem, West Bank regional manager at the Palestinian Businesswomen’s Association (Asala), which is currently providing microloans to about 4,000 Palestinian women.

“It happens often that women continue to do the hard work while their husbands take over the business. We simply cannot control the cultural aspects,” Swelem told IRIN.

In particular in the field of agriculture, women often remain unpaid family workers and as such are invisible contributors to the economy, Asala’s research has shown.

“I try to raise awareness. I ask them, who controls the money?” Swelem said.

“There is still a lot to do on the level of gender awareness. But in one way, the positive impact of the gender meetings is obvious. Many of the women that take the trainings later become trainers themselves.”

ah/oa/cb

– Provided by Integrated Regional Information Networks.

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Washington, DC, United States (ProPublica) – by Cora Currier

Wells Fargo and U.S. Bank have let foreclosed homes in black and Latino neighborhoods lapse into disrepair, while bank-owned homes in mainly white neighborhoods are better cared-for, according to housing advocates.

The National Fair Housing Alliance, a non-profit group, brought a formal complaint to the Department of Housing and Urban Development last week alleging that Wells Fargo violated the Fair Housing Act by failing to keep up homes in minority neighborhoods. Today, the group announced they are also filing a second complaint, against U.S. Bank.

Earlier this month, the group released a survey, which was funded in part by HUD, of more than 1,000 unoccupied, foreclosed homes across the country owned by unspecified banks. When a house is foreclosed upon, the bank that takes it over is responsible for maintaining it. The report cites evidence — photos and interviews with neighbors — showing houses becoming dilapidated under banks’ watch.

The complaint against Wells Fargo claims that among more than 200 homes surveyed, those in black and Latino neighborhoods were much more likely to have yards filled with trash, broken doors, damaged windows, and other signs of neglect. Fewer homes in those neighborhoods had “for sale” signs visible. For example, 68 out of-9 homes in black and Latino neighborhoods had damaged roofs, compared to only nine out of 69 properties in white neighborhoods.

The study looked at homes owned by Wells Fargo in Washington D.C., Baltimore, Philadelphia, Dallas, Miami, Atlanta, Oakland, Calif., and Dayton, Ohio.

A spokeswoman for Wells Fargo said in an emailed statement that the bank “conducts all lending-related activities in a fair and consistent manner without regard to race: this includes maintenance and marketing standards for all foreclosed properties for which we are responsible.” She also said that the bank has a dedicated department that maintains and markets foreclosed properties from loans that are within its portfolio. Since the complaint did not identify specific properties, she said, Wells Fargo has not been able to investigate its claims.

U.S. Bank did not immediately respond to our request for comment, and a spokesman for HUD declined to comment on the complaint.

The report also pointed out that there were simply fewer bank-owned foreclosed properties in white neighborhoods than in minority neighborhoods, an indication, it says, of the fact that African-American and Latino communities were disproportionately affected by the subprime mortgage crisis.

Numerous studies have shown that lenders targeted minorities for the riskiest loans, and often charged them more than similarly qualified white borrowers. A report from the Center for Responsible Lending found that black and Latino homeowners were twice as likely to lose their homes to foreclosure than white homeowners. (The center was started with support from the Sandler Foundation, which is also the major funder of ProPublica.) In the biggest settlement to come out of the government post-bubble investigation of discriminatory lending practices, lender Countrywide (now owned by Bank of America) agreed to pay $335 million to settle a Department of Justice suit.

Nationally, banks or investors own roughly half a million foreclosed homes, and the Federal Reserve estimates this will increase to 1 million this year. Some banks and investors are looking to unload the properties en masse. Fannie Mae and Freddie Mac, who own about half the properties, are piloting a program for bulk sales of their foreclosed properties that requires they be offered as rentals. Other lenders are turning into landlords themselves.

– Provided by ProPublica.org

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Cairo, Egypt David Rosenberg / The Med – An International Monetary Fund loan critical to propping up Egypt’s teetering economy is being jeopardized by domestic political infighting that threatens to delay or even scuttle the program, economists say.

An IMF delegation left Cairo late on Tuesday after 17 days of talks apparently without reaching any agreement on the conditions for the $3.2 billion package. In a statement issued on its departure, the Washington-based financial institution said that Cairo needed to “mobilize the required political support for this program” before its board could approve the aid.

“Broad-based support for a national economic program is essential to bolster confidence and ensure its successful implementation in the period following the current political transition,” the IMF said, although it termed discussions with Egyptian officials and lawmakers “productive.”

Egypt is in critical need of the cash infusion. The economy is sputtering and foreign currency reserves are falling fast as tourism receipts and investment from overseas have plunged since President Hosni Mubarak was ousted from office more than a year ago. Egyptian reserves fell by $600 million in March to $15.12 billion, equivalent to less than the three months’ worth of imports widely seen as the minimum. On the eve of the revolution, reserves stood at $36 billion.

But negotiations with the IMF are taking place at an unusually sensitive time.

Politics are in high gear as Egyptians go to the polls to elect a president next month in a campaign season shadowed by even bigger political dilemmas. A new constitution has yet to be written so that the division of powers between the president and parliament remains up for grabs. Meanwhile, the emergent political establishment of Islamists and liberals is fighting with the interim military government over the timing and terms of the transition to civilian rule.

“It’s an ongoing saga. The problem is that the IMF money comes with conditions attached and countries don’t want to be dictated to,” Daniel Brody, chief investment officer at London-based Silk Investment, told The Media Line.

Two days before the IMF delegation departed, Khairat Al-Shater, the candidate for the Muslim Brotherhood’s Freedom and Justice Party, threw a wrench into the talks by asserting that it was irresponsible for Egypt’s interim government to negotiate terms and leave its successor with the responsibility of repaying the loan.

“We told them [the government], ‘You have two choices. Either postpone this issue of borrowing and come up with any other way of dealing with it without our approval, or speed up the formation of a government,’” he told the Reuters news agency in an interview.

In remarks that could be interpreted as a negotiating tactic aimed at pressing the interim government to hand over power more quickly, Al-Shater said that he might approve a plan whereby only a small amount of the aid package is disbursed before the new government takes power.

Inside the interim government, there has also been considerable policy confusion. The government has been saying it wants to tie up a deal with the IMF this month, but last week Planning Minister Faiza Abu Al-Naga said she expected the two sides to sign nothing more than a memorandum of understanding within a few weeks and only seal a final agreement by June.

The IMF itself said last week that there is no timeline to conclude the loan talks.

The waffling at the top may have to do with broad opposition among ordinary Egyptians from accepting aid of any kind, including from the IMF, according to a series of Gallup polls. Back in August, Egyptians supported IMF assistance by a margin of 57 percent to 32 percent, but by February, when the most recent survey was taken, the public had reversed opinion. Now, 57 percent oppose accepting IMF money versus 36 percent in favor.

“It’s due to a broad misconception in Egypt, which is that Egypt has a lot of misappropriated money in offshore bank accounts from the Mubarak days, so therefore we don’t need other people’s money,” said Silk Invest’s Broby. “The Brotherhood is using this as a political weapon.”

The reports of ill-gotten gains are so rife that in March, Assem Al-Gohary, the head of Egypt’s Illicit Gains Authority, called on the media to refrain from published unverified stories, citing a series of forged documents and unproven reports. The most widespread rumor is that the Mubarak’s family stashed away as much as $70 billion in foreign bank accounts during the three decades he was in power.

But Egypt ultimately may have little choice than to accept the IMF’s offer because the country’s foreign reserves position is more dire than the headline number suggests, according to a report by the London-based consulting firm Capital Economics.

Using figures from February, the latest available, liquid reserves such as convertible securities, currency and deposits, were less than $9 billion, or just two months of import cover, its Middle East economist, Said Hirsh, said in a comment. About $4 billion of the $15.2 billion total is gold bullion that the government would be reluctant to draw down.

The government itself is gradually reaching the limits of what it can borrow domestically to cover a yawning fiscal deficit. It has relied on loans from domestic banks to cover the gap, but economists say the banks are reaching the limits of their ability to lend. A fiscal crisis may well up as early as next month if the first of the IMF disbursements has not come through, economists warn.

With Egypt heading toward a financial crisis and the IMF loan’s fate still unresolved, a market rally that began at the start of the year has fizzled out in the past month over concerns about the economy and Egypt’s chronic political turmoil.

This week alone shares on the Egyptian Exchange were shaken by Al-Shater’s IMF remarks on Sunday and two days later by a court’s decision suspending the constitutional assembly. On Tuesday, the Egyptian Exchange’s benchmark EGX 30 index marked its sixth straight day of declines to finish at its lowest since Feb. 6.

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Washington, D.C., United States (AHN) – Mortgage rates remained virtually unchanged in the week ended April 5, another mixed signal about the pace of the economic recovery in the United States.

According to the latest report out Thursday by mortgage giant Freddie Mac, the 30-year fixed-rate average remained just below 4 percent after falling below that significant threshold two weeks ago for the first time in months. The average this past week was 3.98 percent, a hair lower than the 3.99 percent posted in the prior week. It remains well below the 4.87 percent registered this same time a year ago.

The 15-year average also slipped slightly, falling from 3.23 percent last week to 3.21 percent, and down from 4.10 a year ago.

The 5-year hybrid adjustable rate mortgage dropped from 2.90 percent to 2.86 percent. The 1-year ARM held steady at 2.7 percent.

News this past week on the housing market has been less than encouraging.

Sales of foreclosed homes are expected to rise 25 percent to 1.2 million this year, according to recently released data from Moody’s Analytics. In addition, nearly one third of real estate agents surveyed in a recent National Association of Realtors report they faced more closing cancelations in March from what they saw in February.

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Riyadh, Saudi Arabia (The Media Line) – When Reem Muhammad sought a personal loan to pay off some lingering debts, a Saudi bank offered 100,000 riyals ($26,667). The price tag? Repayment of the loan, plus 33,000 riyals.

“I took the loan and repaid it, but I never knew what the 33,000 was for since it wasn’t interest,” Muhammad, 38, told The Media Line. “But it sure felt like interest.”

Muhammad is one of thousands of Saudis taking advantage of Saudi Arabia’s healthy economy and banks’ increasing willingness to offer personal loans and credit cards. Her loan also illustrates the continuing debate in the Saudi banking industry whether some aspects of the loan system contravene shariah, or Islamic law, that guides how Muslims conduct financial transactions.

Personal loans in Saudi Arabia jumped nearly 20-fold to a staggering 219 billion riyals in 2011, up from an estimated 11 billion riyals in 1998. Loans included 27.7 billion riyals in property loans due in part to the passage of the 2011 mortgage law. Credit card debt in 2012 is estimated about nine billion riyals.

Asher Noor, chief financial officer for the Riyadh-based AlTouq Group, a global investment firm, told The Media Line the increase in loans reflects Saudi Arabia’s strong economy.

“I find the increase in line with the growth of the Saudi economy, an emergence of an affluent middle class and creation of more high net worth individuals now than at any time in the past,” says Noor, who emphasizes he was offering a personal opinion. “The surge in personal loans is not just due to proliferation of credit cards in the Saudi economy, although plastic money has clearly made it easy to stack up debts. Real estate loans have also been a big reason for personal loan surge.”

Until about 2000, banks were reluctant to issue personal loans to individuals, preferring to limit their lending to large companies. Consumer credit card use was also relatively rare.

However, the demand for easier access to money has increased as the Saudi middle class has grown more affluent. Banks devised methods to offer credit cards compliant with shariah. Islamic law does not permit usury, charging or paying interest and conducting business contrary to Islamic values, such as operating a casino and selling pork or alcohol.

Saudis pay a fixed monthly fee on credit cards. Banks may require customers to have a savings account with a specific amount of money on deposit. Charges for late payments may be about 3 percent of the outstanding balance. Another way the card issuer earns a profit is to pre-purchase an item a customer plans to buy and then instantly resell it to him at a higher price.

Noor acknowledged there is “cause for concern” over the rapid increase in consumer loan and credit card debt, but the Saudi Arabian Monetary Agency (SAMA) has not allowed it to get out of control. “I think SAMA has not been asleep at the wheel and has kept the commercial banks in check with regulations like limiting loan to deposit ratios.”

SAMA in 2006 established regulations that total loans may not exceed 33 percent of the total salary of employees and 25 percent of the income of retirees. Nabil Al-Mubarak, executive-director of SIMAH, told the Arab News that SIMAH’s policy labels card debtors as defaulters under two conditions: if they have not paid for six consecutive months and if the amount due is SR 500 and more.

Noor said the criteria to issue credit cards is heavily regulated in Saudi Arabia, noting that customers are rarely pre-approved and must prove their eligibility for credit cards. “There are SAMA regulations dictating the credit card and personal loan limits and the central database [Saudi Credit Bureau] SIMAH is monitoring defaults,” he said.

Noor said that given the large expatriate population, whose work and residence permits are linked, banks are very careful in credit card issuances and usually require having a bank account with them, salary transfer and employer letter before a card is issued.

“Since expatriates here are unable to leave the kingdom with credit card debts disproportionate to their earnings or end of service, the banks here have not struggled with staggering default rates as elsewhere,” Noor said.

Yet the explosion in obtaining credit cards and personal loans, and how banks charge fees, has led to consternation among some Islamic scholars whether the high fees are tantamount to paying interest.

Ahmed Alkady, a trainer at the Jeddah-based Islamic Development Bank, told The Media Line that he sees no difference between paying penalty fees and charging interest on credit cards.

“I don’t use or even recommend credit cards,” Alkady said, “It is a hidden type of interest as banks make you pay what they call a fine or a penalty for failing to pay them back on time. The same thing is applied in non-Islamic banks but they call it interest. I see no difference between the two unless you make sure you don’t use it for drawing cash. Or when you buy goods make sure you pay it back before the end of the time limit.”

Alkady also considers Muhammad’s 100,000-riyal loan as contrary to Islamic values with some Saudi banks skirting shariah-compliant regulations.

Islamic banks use an asset-based loan system, such as providing an automobile loan, in which the bank purchases the car, maintains ownership and then rents it to the customer. The customer makes monthly payments that add up to more than what the bank paid for the vehicle. Ownership is then transferred to the customer once all payments are made.

Alkady described Muhammad’s loan as tawreeq, or securitization, meaning the asset is made into a financial tool like a share in a company. The transaction originates with an item, such as equipment or even property bought by the bank and then sold to the customer to be paid for on an installment basis. This allows the bank to raise the price of the item as a way of earning a profit while at the same time providing immediate liquidity for the borrower.

However, the Organization of Islamic Cooperation’s International Council of Fiqh Academy, a group of Islamic scholars, ruled in 2009 that tawreeq is “legal trickery” with roots in interest-based lending.

Alkady said the Islamic Development Bank followed with a similar ruling in April 2011. “The bank’s scholars have issued a decree in which they consider tawreeq un-Islamic simply because the bank is selling goods that it does not actually own,” he said.

Yet most Islamic banks worldwide embrace tawreeq, with many Islamic scholars in Muslim countries endorsing the practice.

Sami Al-Nwaisir, chairman of Al-Sami Holding Group, wrote in the Arab News recently that loans “favor the banks and their regulations” and “the unfair contracts by banks designed for their benefit alone, which victimize and suppress the individual through the systematic brutality of the one-sided agreement.”

Noor faults the banks for not educating borrowers. “Islamic banking is asset-based and borrowers need to understand that to better appreciate it,” he said. “Bankers, however, remain the culprit by complicating documentation and structures, and thus making it difficult for the layman to make a rational choice.”

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