Denmark: New financial institute to offer sharia products

A new Danish financial company intend to market products according to Islamic law, and that means without interest.

According to Islam Muslims must not earn money from money without risk. Therefore they're not allowed to take interest, and that made financing buying a home difficult for Muslims living in Denmark. A new Danish finance institute, Amanah, targets Islamic clients and offers financing that does not conflict with Islam, according to Finans magazine.

Niels Mølgaard is the man responsible for the financing institute, that will open its doors in the beginning of 2008.

There are about 200,000 Muslims in Denmark. Real estate agency "Home" estimates that 30,000 are potential homeowners.

Niels Mølgaard says that the market is large enough for them to be able to build a sound business.

Amana, which means "trust" in Arabic, [ed. and in Islam 'free will'] will first concentrate on financing buying residences. They might be expected to offer other forms of financing but Amanah will never be a real bank. Niels Mølgaard says they other other products on the way, but it takes time to fully develop them, so they are completely in agreement with Sharia.

Though the target group is well defined, non-Muslim clients are also welcome in Amanah. Niels Mølgaard says they don't treat anybody differently, and that their loans are available to everybody, regardless of their religion.

Peter Nannested, professor of public policy at Aarhus University, doesn't think there's a big market for Islamic products in Denmark. He says that in 2004 they had studied through Denmark Statistics the five largest Muslim immigrant groups and found that 2/3 of Muslims for whom religion meant a lot, earned less than 200,000 kroner (~$40,000). A low income group doesn't seem to him an especially attractive customer base for banking businesses.

Source: DR (Danish)

See also: Netherlands: Interest in Muslim loans unclear , Norway: Interest in interest-free banks, Sweden: No interest in Islamic banking, Germany: Deutsche Bank launches sharia-compatible funds