The Islamic Welfare Society, Bhatkal, Karnataka provides interest-free Islamic loans to poor and needy of all faiths while taking jewellery and gold as collateral.
“This is a very convenient option for poor and needy borrowers. The money being lent out is financed by the mosque,” an official of the Islamic organisation was quoted in a report by IlmFeed.
“These days, halal financing can be hard to find, and the current economic model has led to the financial stress on the poor increasing day by day. However, in the small city of Bhatkal in India, an Islamic institution aims to provide a ray of hope to those in need,” the report added.
Rather than charging interest, the Islamic Society accepts jewellery and gold as collateral.
“However, in their 33 years of service, they have yet to sell or auction off a single piece of jewellery or gold, showing how sustainable their model is, for both themselves and the borrower,” the official said.
This service is not designed for Muslims only and people of any faiths are welcome to take our loans. 30% of their customers are non-Muslim!
Unfortunately, the official said, the Indian government has yet to recognise the organisation as a bank, and therefore they have to operate as a society in Bhatkal.