"Shariah-compliant finance is now an established and trusted part of the mainstream UK financial services landscape, used by Muslims and non-Muslims alike."
The UK's first Shariah-compliant bridging lender, Offa, has entered the market.
The Birmingham and London-based lender will initially provide Shariah-compliant residential and commercial bridging facilities with a maximum FTV (Finance to Value) of 75% and 65%, paying procuration fees of up to 2% to brokers.
It is also planning to launch a refurbishment, stretched development, planning and shared risk ethical finance facility (the Shariah-compliant equivalent of a joint venture).
Offa will provide finance to UK residents, expats and international clients based overseas. It will lend to individuals, sole traders, partnerships, limited companies, LLPs as well as on and offshore SPVs.
The lender launches with a £20m funding line provided by a Shariah-compliant UK financial services firm and says it is in advanced talks with another Islamic finance institution for an additional £100m of funds.
Offa is headed up by Bilal Ahmed, former CEO and co-founder of Signature Private Finance.
Ahmed left Signature Private Finance to set up Offa with his co-founders -Tarek Kallel, head of business development, and Haris Akhtar, head of investments.
Bilal Ahmed commented: “Shariah-compliant finance is now an established and trusted part of the mainstream UK financial services landscape, used by Muslims and non-Muslims alike. With Offa, we’ve set out to extend its reach into bridging and other specialist forms of lending, which are as yet untapped but experiencing significant demand as property investors seek alternatives to the high street. The UK’s Muslim population is set to grow to 13m by 2050 from its current level of 3.4m and so we feel this is a high growth market with a long-term future.”
Tarek Kallel added: “While we’ll be accepting applications direct, the broker channel will be integral to our proposition and we are keen to speak to intermediaries who want to add Shariah-compliant bridging finance to their propositions. There are a lot of investors in the UK market who will relish the chance to take out short-term finance that is consistent with Islamic principles and brokers who can accommodate them will benefit from a strong new revenue channel with considerable long-term potential.”