Quote:
Originally Posted by MoneyGuy
What's the objection with interest being paid? Do Muslims have a religious objection to interest? Not that I mind that because I advise my clients to avoid interest if at all possible.
There are now Muslim-friendly mutual funds or MF-type investments available.
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I believe I heard it was something about interest implying that the lender somehow 'owns' time and that according to their religion only Allah or God can 'own' time. Very similar to Medieval Christian beliefs.
The bonus I find with Muslim-friendly mutual funds is that they fit in perfectly with a client with a low risk tolerance whether they are actually muslim or not. The companies allowed in the portfolio are all low leveraged companies that seem to stick around longer than others. Solves a bit of the 'suvivorship bias' issue with the performance of funds over long periods of time. The negatives are that if you're a business who wants to build something at cosiderable capital cost in a Muslim country the mechanics of getting a loan to help fund it are difficult should the local laws care about how a foriegn company funds its projects.