Is Islamic Financing better for Real Estate financing than the Essay

Is Islamic Financing better for Real Estate financing than the conventional Financing - Essay Example (Tarek El Diwany, 2003) While conventional banking is more of a profit oriented business seeking interest on the finance provided to the consumer, being part of the capitalistic interest based financial system, etc. (Kabir Hassan and Mervyn Lewis, 2007) Islamic banking activities are mostly clustered around three parts of the world; Middle East, South Asia and Southeast Asia. It is further reported that Islamic banking system provides services in the real estate sector in many Muslim countries and banks have started special windows to attract petrodollars from the Muslim people. It is further reported there is high scope for investing Islamic financing in real estate market in Singapore, Malaysia, Saudi Arabia, Pakistan, Bahrain and other Muslim nations as it offers more ethical and efficient alternatives as compared to the interest based conventional banking system.(M. Mansoor Khan and M. Ishaq Bhatti, 2008) Since the Islamic financing has strong foothold in many of the Muslim count ries and provides services in various fields, it is believed that Islamic finance is better than the conventional financing system with regard to the financing in real estate sector as it provides more customer oriented services unlike the conventional banking where profit is the first objective of the organization. Hence the present study is proposed into the research of Islamic financing system and conventional financing system, and which is the best suited in the area of real estate financing to the public. Zamir Iqbal et al (2009) mentioned that the conventional financing system which is based on debt financing has taken a set back after the recent credit crisis that started with the initial collapse of the sub prime real estate market in the United States in 2007. Islamic banking and finance represents the worldwide phenomenon that is taking place in Malaysia, Indonesia, the United