Sharia Finance
Seeking growth within your faith? We understand the unique challenges facing Sharia-compliant businesses who cannot take advantage of the conventional debt-based products on the market.
At Hilton Smythe, our knowledgeable brokers are passionate about connecting businesses with ethical and transparent funding options that honour their owners’ beliefs.
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What is Sharia Finance?
Islamic finance or Sharia-compliant finance is a term encompassing financial products that are compatible with the laws of Islam.
Foundational principles within Islamic Finance include:
- Prohibition on usury, interest or excess: Sharia law prohibits the use of interest and premiums, referred to as “riba” in Islamic finance, and prioritising risk-sharing and profit-sharing arrangements between the institution and its clients.
- Prohibition on speculation or uncertainty: Sharia-compliant prohibits speculative activities known as “maysir,” which translates to “gambling” and encompasses elements of unpredictable outcomes and profit derived solely from chance. As a result, many derivative transactions commonly employed in conventional finance, where the value fluctuates based on underlying assets, are considered unsuitable for Sharia-compliant investors. Additionally, conventional insurance products often fall under the category of “haram” (forbidden) due to their inherent reliance on uncertain future events.
- Prohibition of haram goods, services and activities: Investment must not be in businesses related to alcohol, pork products, gambling, pornography and weaponry.
Conventional debt-based products are not allowed on the basis that the investor makes profit by means of receiving interest.
Islamic banks in the UK include:
Fully Sharia-compliant
- Abu Dhabi Islamic Bank
- Al Rayan Bank
- Bank of London and The Middle East
- Gatehouse Bank
- QIB UK
Conventional banks offering Islamic financial services
- ABC International Bank
- Ahli United Bank
- Bank of Ireland
- Barclays
- BNP Paribas
- Bristol & West
- Citi Group
- IBJ International London
- J Aron & Co
- Lloyd’s Banking Group
- Royal Bank of Scotland
- Standard Chartered
- UBS
- United National Bank
From working capital solutions to project financing, we navigate the intricate world of Sharia-compliant finance on your behalf:
- Profit-sharing (Mudarabah): Collaborate with investors who share in your profits and losses.
- Cost-plus financing (Murabaha): Purchase assets through a transparent markup on their cost, inclusive of a pre-agreed profit margin.
- Leasing (Ijarah): Gain access to equipment or property through lease agreements with ownership options.
Benefits of working with Hilton Smythe:
- Market independence: Forget biased recommendations. We’re 100% independent financial advisers, free from funder or product restrictions. No commissions, no conflicts, just your best shot at financing tailored to your goals.
- Access to a wide panel of lenders: We source exclusive loan deals unavailable through traditional lenders, unlocking bespoke lending solutions that meet your specific needs.
- A leading SME finance specialist: We’ve been focused exclusively on SMEs since 2018, helping countless businesses reach their growth goals.