Consulting services firm Sharia Lab intends to replicate a Nigerian property investment model in the UK leveraging off the Islamic concept of pooled funds acting as a collective guarantee for its contributors to flip real estate, Founder Ibraheem Ahmad shared with IFN Investor.
While this concept may be viable among a small group of investors already familiar with each other, Ibraheem said expanding this pooled fund offering to a wider audience can be tricky under current UK financial regulations.
Determined to get this pooled fund concept recognized as a potential Shariah compliant investment offering in the UK, Ibraheem said legal experts are currently evaluating how best to comply with licencing requirements.
“This concept is based on the ethical real estate investment strategy managed by Yahshud in Nigeria. It does not seem to be recognized under UK law, so maybe we can explore structures like a cooperative or a private equity firm but I prefer to see it as a thrift institution.”
Ibraheem acknowledged the main hurdle involves trust between investors within each pooled fund grouping. “A transparent structure with Shariah-principled agreements can do much to foster such trust. Once the right pieces are in place, I am confident this concept will gain wider acceptance.”
Ibraheem suggested the fund pooling concept to a group of Muslim entrepreneurs who were struggling to venture into individual business prospects and the result has been positive so far.
“Starting with about GBP40,000 (US$53,560) over a year ago, this group’s fund pool has grown to over GBP350,000 (US$468,631). They conducted renovations and sold the properties after three to six months, reinvesting into a cycle they have repeated several times.”
Buoyed by this success, Ibraheem is keen on encouraging these entrepreneurs to offer their services to other Muslims in the UK – especially middle-class immigrants who are unable to compete with richer folk able to deploy millions.
Ibraheem is further looking into historical Islamic financial inspirations to come up with more ethical investment opportunities, aiming to have Sharia Lab recognized as an innovator for Muslim gains.
