Monday, October 17, 2011

Sharia-compliant Banking in Canada Going Broke

photo source here

The leading promoter of Sharia banking in Canada,UM Financial Inc. has gone into receivership without much fanfare. None of the nation's newspapers have bothered to report the development, despite the fact it could possibly affect hundreds of homeowners. Had it not been for a tweet by an affected Muslim homeowner looking for a lawyer, the story of UM Financial going broke would have escaped even the scant attention the news received on social media.
Tweeting under the username @UM_FinanceBROKE, the tweeter wrote:
"Sorry Toronto Muslim Homeowners, I have bad news. I just learned UM Financial is Bankrupt. I need a good Canadian lawyer"
The troubles at UM Financial did not come overnight. As far back as April 2007, the Toronto Star reported on the company's liquidity problems.The Star wrote that Omar Kalair, the founder of UM Financial, "is working hard to maintain on-going sources of funding." Kalair disclosed that the Credit Union Central of Ontario had extended an additional $50 million to the Sharia banking promoter, and "that will keep us going until the summer." Apparently, this month the money ran out and UM folded tent.
The consequences of this bankruptcy may effect thousands of Muslim homeowners. Leading up to the bankruptcy, there were quiet rumblings of discontent in the community. One indignant Muslim homeowner wrote to the Toronto Star:
"In the name of Shariah-compliant mortgages they charge extra fees... After accepting and approving our application, they refused us financing just a week before the closing of our home, thus putting us into great trouble... This last-minute refusal made us get a mortgage from an alternate source at a higher interest rate and spend an extra $2,500 for moving costs and living in a hotel with the entire family for one week."

What is Sharia Banking?
read the rest here

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