Islamic banking and finance in Canada
From Wikipedia, the free encyclopedia
The demand for Islamic banking and finance has grown in Canada due to the growing Muslim population[1] in the country who want to avoid riba and other financial practices in violation of sharia. These sharia-compliant financial products are not offered by main financial institutions and, thus, small financial companies are major players. However, major companies like WealthSimple are starting to embrace the idea.[2] A growing number of Canadian fintech firms now offer Shariah-compliant home-financing models based on co-ownership (diminishing partnership) rather than conventional interest-bearing mortgages.[3]
History
A Toronto-based financial company UM Financial started giving Sharia-compliant loans to Muslims in 2005 in partnership with Central 1 Credit Union of Vancouver. The company planned to offer no-interest MasterCard as well.[4] UM financial was ordered to go into receivership by the Ontario Superior Court on October 7, 2011.[5] Omar Kalair and Yusuf Panchbaya of UM Financial were charged by RCMP for $4.3-million mortgage fraud, but both men were acquitted of all counts contained in the indictment in Ontario Superior Court June 7, 2019.[6]
The 2024 federal budget announced on April 16 included plans to bring halal mortgages into financial regulatory system.[7]
Islamic financial products
Mortgage products
| Company | Islamic model | Year of Inception | Funder | Funding from Banks/ Credit Unions | Serving province | Sharia Standards | Sharia Certification | External Review | Website |
|---|---|---|---|---|---|---|---|---|---|
| EQRAZ | Commodity Murabaha | 2022 |
Alberta |
AAOIFI | Shariyah Review Bureau | Mufti Mirza Zain Baig (CCIRI) | |||
| IjaraCDC Canada | Ijarah-wa-Iqtina | 2008 | Yes | AMJA [8] Ebrahim Desai[9] | |||||
| Aya Financial | Diminishing | Yes | Ontario | Ebrahim Desai[10] | |||||
| Zero Mortgage | Diminishing | Yes | Ebrahim Desai[11] | ||||||
| Manzil | Murabaha | 2019 | Manzil Mortgage Fund | No | Ontario | AAOIFI (disputed [12]) | Ebrahim Desai[13] | ||
| Manzil | DiminishingMusharakah | 2019 | Manzil Mortgage Fund | No | AAOIFI | Ebrahim Desai[14] | |||
| Canadian Halal Finance Corporation | Murabaha
Diminishing |
2021 | Alberta | ||||||
| Halal Homes | Murabaha
Diminishing |
Alberta | |||||||
| Murabaha Homes | Murabaha | Archived 2022-01-06 at the Wayback Machine | |||||||
| An-Nur Co-operative | Co-operative | Archived 2021-04-10 at the Wayback Machine | |||||||
| Ansar Co-operative | Diminishing | 1980 | Co-operative | Ontario | Ebrahim Desai[15][16][17] | ||||
| Interest-Free Housing (Formerly ISNA Housing) | 2008 | Co-operative | |||||||
| Al Ehsaan Housing | Diminishing | 2007 | Co-operative | Saskatchewan | |||||
| Qurtuba Housing Coop | Diminishing | 1990 | Co-operative | Quebec | |||||
| Assiniboine Credit Union | Diminishing | Credit Union | Yes | Manitoba | Archived 2021-10-31 at the Wayback Machine |
Investment products
| Product | Type | First year of offering | Company | Available through | MER | Sharia Certification | Website |
|---|---|---|---|---|---|---|---|
| Mackenzie Shariah Global Equity Fund | Mutual Fund | 2024 | Mackenzie | Assad Wealth Management | 0.8 | Rating Intelligence | Link |
| Wealthsimple Shariah World Equity Index ETF (WSHR) | Exchange-traded fund (ETF) | 2020 | WealthSimple | gold ETF 0.18%, equity ETF 0.5% [18] | Ratings Intelligence [19] | Archived 2024-06-15 at the Wayback Machine | |
| Wahed FTSE USA Shariah ETF (HLAL) | Exchange-traded fund (ETF) | 2019 | Wahed Invest | 0.5% [20] | |||
| The SP Funds S&P 500 Sharia Industry Exclusions ETF (SPUS) | Exchange-traded fund (ETF) | 2019 | SP Funds | 0.49% | |||
| SP Funds Dow Jones Global Sukuk ETF (SPSK) | Exchange-traded fund (ETF) | SP Funds | |||||
| The SP Funds S&P Global REIT Sharia ETF (SPRE) | Exchange-traded fund (ETF) | SP Funds | |||||
| Global Iman Fund (IMANX) | Mutual Fund | 2008 | Global Growth Assets | ||||
| Manzil Mortgage Fund (MANZL) | Mortgage Fund | 2019 | Manzil | Manzil/ CI Direct | 1.5% [21] | ||
| Sukak - Term Deposit | Mortgage Fund | 2019 | AYA Financial | Moya Financial |
Roboadvisors/Investments Managers
Some institutions have started offering accounts including Registered Education Savings Plan (RESP), Registered Retirement Savings Plan (RRSP), Tax-Free Savings Account (TFSA) etc.
| Company | First Year of Offering | Fees | Minimum Investment | External Review | Website |
|---|---|---|---|---|---|
| Assad Wealth Management at IG Wealth Management | 2004 | 0.6% to 1.35% | $50,000 | ||
| Manzil (through CI Direct) | 2019 | 0.6% | |||
| ShariaPortfolio | 2020 | 0.5 to 2% | |||
| Wealthsimple Invest | 2021 | 0.4 to 0.5% | No minimum | ||
| Global Growth Assets | 2008 | Global News [22] | |||
| Canadian Islamic Wealth |