IFAs are ignoring an untapped client base by dismissing Islamic finance as something only for Muslims.
Bosses at Offa, a UK-based Islamic property finance firm, are experiencing a weekly increase in non-Muslim customers choosing Sharia-compliant buy-to-let (BTL) products, because they are attracted by its ethical model.
Offa works with brokers and financial advisers and wants them to realise this opportunity to increase their client base.
Sultan Choudhury, executive chairman at Offa, said: “IFAs should not dismiss Islamic finance as something just for Muslims, as our experience shows that many non-Muslims are interested in Sharia-compliant products too.
“The idea that Islamic finance is only for Muslims is a misconception. Indeed, 44 per cent of our bridge finance customers are non-Muslim.
“We are experiencing a weekly increase in customers choosing Islamic BTL finance, and this includes non-Muslims who are attracted by our ethical finance model.”
We find that non-Muslims are often attracted by our ethical approach to finance.
Sharia-compliant finance products are often targeted at the 3.9mn Muslims living in the UK.
But Choudhury suggests that there is big demand for modern, high quality Islamic finance products from non-Muslims too.
In fact, he revealed that the majority of Offa’s non-Muslim BTL customers are British expats financing properties in the UK.
He said this is because many are enticed by their ethical finance model that is designed in accordance with Islamic finance principles.
He said: “We find that non-Muslims are often attracted by our ethical approach to finance.
“Apart from not charging interest, we also do not invest in sectors deemed harmful to society such as alcohol, tobacco, gambling, animal testing and the arms trade – and that is increasingly attractive to everyone.
“They’re also attracted by our fast funding decisions, a commonsense approach to making decisions and the lack of paperwork required.
“We have a unique perspective on this at Offa, because we launched an innovative new BTL service in 2024. We do not charge interest but rather co-own the property with the customer who pays rent on the portion of the property that Offa owns.
“In addition, customers have been attracted by fast funding decisions delivered via a modern paperless process, which had been lacking previously in the traditionally old-fashioned and cumbersome world of Islamic finance.”
How advisers can encourage people
He added there are many things advisers can do to also encourage an interest in Sharia-compliant products amongst their non-Muslim clients.
Choudhury said: “Advisers can create awareness of Islamic finance simply by stating that they offer Islamic finance solutions within the messaging of their marketing campaigns across all channels as well as client seminars and direct conversations when they interact.
“Once customers are aware that Islamic finance exists as an option, we can highlight how the industry is changing for the better.
“For example, Offa is now competing with the best banks and finance houses in the country in terms of speed of financing decisions.
“It is also important to mention again our ethical approach to finance, which is a big reason that non-Muslims choose Islamic finance products.”
We do not profit from penalty fees for late payments, instead giving the excess-over-costs incurred to charity.
He added that regulations play an essential role in governing financial products, and one of the key benefits of Islamic finance is its values-driven approach, which emphasises high ethical standards in financial conduct.
Choudhury said: “Many safeguards are naturally integrated into our ethical framework even before regulatory requirements. For instance, we do not charge further profit or rent on arrears or fees, avoiding compounding.
“Also, we do not profit from penalty fees for late payments, instead giving the excess-over-costs incurred to charity.”
Aamina Zafar is a freelance financial journalist