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President
of the Manzil Co-operative Society Ltd board of directors
Isa Jerome Chambers.
Photo: Lester Forde
BY
GIZELLE MORRIS
Imagine being able to buy your own home without the burden
of paying interest rates or a mortgage loan.
Interest-free home and property ownership is exactly what
T&T’s newest co-operative, Manzil Co-operative Society
Ltd, seeks to offer its members.
The Manzil home acquisition plan is based on a declining balance
approach which places the buyer and the co-operative as co-owners
on the property. Under the terms of the programme, the buyer
does not repay an interest-bearing loan.
President of the fledgling co-operative, Isa Jerome Chambers,
said the organisation is based on the tenets of Sharia, or
Islamic religious law derived from the Qur’an.
“The
idea for Manzil came out of a need for the provision of Sharia-compliant
financing in the area of property development,” said
Chambers on Thursday during an interview at the co-operative’s
Santa Maria Plaza, Mucurapo Road, St James, office.
He also stressed that Manzil, registered as a co-operative
in December 2005, is not a “fly-by-night concept,”
or a front for any radical Muslim group.
So worried was he about the latter, Charles, a Muslim of African
descent, revealed that he was hesitant about accepting the
post of president.
“It
is firstly an Islamic financial institution,” Chambers
said.
What this means is charging interest, or riba, is not permitted.
Chambers said Manzil is an alternative for Muslims interested
in property and land development, but without the obstacle
of riba.
The Qur’an, he explained, states that engaging in usury—the
collection or payment of interest—is prohibited.
“If
the Qur’an says stay away from riba, do not deal in it,
nor take, nor give; the choice is clear,” he said.
Chambers said this is the biggest difference between Manzil
and other co-operatives.
But if the co-operative will not charge interest, how is the
company to make money?
According to Chambers, Manzil’s profit lies in trade.
“For
now, we are concentrating on buy-and-sell transactions, as
opposed to going through the financing process,” he said.
Chambers explained that unlike other banks, which loan a prospective
buyer money, in Islamic mortgage transactions, the institution
purchases the property.
The financial institution then re-sells the property to the
buyer at a profit, while allowing the purchaser to pay in
instalments.
During the stipulated payment period, both parties will be
co-owners with the buyer having the option to purchase the
co-operative’s share in the property.
Because this type of commerce is based on Islamic laws, there
are no penalties to the buyer for late payments.
Chambers also said if a member encounters problems in making
payments repossession is not automatic.
“If
a person is unable to afford to pay, the majority share holder
can sell the property at market value,” explained Chambers,
who has worked out of the office of the Commissioner of Co-operatives
for the past 15 years.
And even then, said Manzil’s treasurer Wayne Herbert,
the co-operative can only recover what it is owed and the
member is refunded their initial investment.
But repossession, said Chambers, is extreme, because in most
cases, allowances would be made for persons in financial difficulty.
“In
all these agreements, we are relying on the person to behave
like a good Muslim,” said Chambers.
Which brings us to another major issue.
Membership in Manzil is only available to Muslims—of
good character.
“The
whole entity is really there for the welfare of the Muslim
community, to provide one of the basic requirements for man
and that is a home,” said Chambers.
As part of their commitment Manzil has a Sharia board, consisting
of Islamic scholars, including Mufti Waseem Khan and Sheik
Yusuf Talal De Lorenzo (member of the Canadian Islamic Bank
and Dow Jones Company Sharia board).
“A
Sharia board is a requirement for Islamic financial institutions,”
said Chambers. “The management has a commitment to pay
attention to what the Sharia board has to say.”
The board ensures all investments comply with Islamic law.
Islamic financial organisations are forbidden to invest in
businesses engaged in the production, or trade, of alcohol,
pork, gambling and un-Islamic media, like pornography.
“We
must ensure that everything complies (with Sharia) because
it is easy to slip into interest in a capitalist society,”
said Chambers.
The September 2, launch of Manzil at Rasam Restaurant, City
of Grand Bazaar, Valsayn, signalled the co-operative’s
readiness to enter the real estate business.
Although the membership now stands at 65, Chambers said because
of the unique service Manzil offers this number is expected
to grow at a rapid rate.
“Property
development is one of our long-term projects. We are not trying
to make gated Muslim communities, but we are creating homes
for the general public,” said Herbert.
Bheemal Ramroop, Commissioner of Co-operatives at the Ministry
of Labour, who attended the launch, wished Manzil’s new
board success, but issued a note of caution.
“Be
constantly vigilant. We’ve had organisations with intentions
of getting into housing, but they have not delivered based
on the expectations of members,” he said. “We have
societies getting into this area without doing research and
in their enthusiasm to get ahead sought to purchase property
without realising they could not get the proper approvals
and now the land is of no use to members,” Ramroop added.
In challenging the board of directors to ensure accountability
and transparency in all its’ dealings, Ramroop said Manzil’s
venture was a much needed service, particularly with the escalating
cost of housing and real estate.
Kwesi Atiba, of the Islamic Resource Society, also offered
the fledgling co-operative words of encouragement and commended
the board for taking up the challenge to provide affordable
housing in T&T.
Also addressing the gathering was Yacoob Ali, president general
of the Anjumaan Sunaat Ul Jamaat Association.
“Poverty
and deprivation affects the mass of Muslim people in the Diaspora,
organisations like these help look after our brothers and
show we are a people who care .” he said.
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