It was announced on the news today – CNN or Channel News Asia – that Islamic Banking is on the rise, even with non-Muslims and in Non-Islamic countries.
Why? And what the heck is Islamic banking anyway?
Fahim explained to me a long time ago that Muslims aren’t supposed to earn interest on their bank accounts, and no gambling, so no stock market either. Okay.
Not my choice, but that doesn’t matter.
He’s looked for bank accounts here that don’t pay interest, but it seems they don’t exist. In Canada, it’s actually very easy to find them. Not so in Sri Lanka.
Anyway, this is, I gather, the basis for Islamic banking.
And this is where I put in a side note about how we both watched the same news item about Islamic banking, and while I understood exactly what they were saying, Fahim walked away clueless. Girls rule.
Basically, instead of having loans with interest charged, which inevitably results in most people not having a clue what the cost of the loan is at the end of the day, they have loans with an upfront stated loan cost. Not interest rate. Loan cost.
Okay, so it probably works out to around the same cost at the end of the day, but this way, there is complete disclosure about exactly how much you have to pay back. No questions. No fluctuating interest rates. No fluctuating interest payments. No questions later about "This is costing me how much????"
Oh, yeah, I see the appeal. No doubt about it.
This would likely simplify matters for a whole boatload of North Americans who are constantly and increasingly in debt. Maybe it would even help them get better control over their debt.