HOUSE FINANCING BY ISLAMIC BANKS: INCIDENCE IN THE PROVINCE OF SINDH-PAKISTAN

Abstract

The Islamic banking system is based on the Law of Shariah, which emphasizes social justice and the equitable distribution of wealth. This system addresses the financial inclusion which aims to control poverty and build a healthy economy. Islamic banks, motivate individuals and businessmen to mobilize their savings. The purpose of this study is to analyze the availability of house finance, provided by Islamic banks, in the province of Sindh; to fulfil the basic need of shelter. Everyone aspires to own a house, but due to limited resources, people face massive impediments; moreover, it becomes difficult for the government to provide adequate housing facilities to the entire population. To address this issue, Islamic banks introduce different Islamic housing instruments, which wholly comply with the Islamic law of Shariah. Sindh is the second largest province of Pakistan and it faces enormous complexities regarding housing problems. Without much ado, the government initially introduced some housing schemes, however, due to the extensive population; they were unable to satisfy the need for shelter for all the citizens. The Government ought to introduce new housing schemes, besides the existing ones. The Private sector should also assist the government in this matter, by constructing colonies for their respective employees and deducting a certain nominal amount from their salaries; to ensure that by the time of their retirement, they become the owners of their own houses. Descriptive statistics technique is used to analyze the housing schemes, comparing population. The State bank of Pakistan should instruct Islamic banks to introduce new house finance schemes, which not only fulfil the need for shelter; but also adhere to the Islamic principles.