EDAID has launched the first ever Sharia-compliant crowdfunding platform to finance Muslim students interest-free.
QardHasan will help students raise up to £30,000 within 40 days, channelling funds from charitable trusts and potential employers.
The UK-based impact investment firm looks to contribute to each crowdfunding campaign by doubling every £500 raised by a borrower through the platform.
Students would only be called to start repaying the loan in tranches once they have graduated and found a job – with repayments being capped at 10 per cent of their net salary. EdAid would also step in to help them getting hired in case they are still unemployed by the April after their graduation.
The firm’ founder and chief executive Tom Woolf said the new platform aims to provide affordable and fair funding options to Muslims who are currently locked out of the education system, and thus the broader job market.
According to government estimates, there are about 125,000 British Muslim students and up to another 100,000 who choose not to attend university due to a lack of funding or an acceptable form of ethical financing, Woolf said.
Current funding options based on interest payments would clash with Sharia guidance, which excludes interest-based financial transactions.
Woolf said the project falls somewhere in between LinkedIn and Kickstarter, as it helps students build up a broader network for their academic and professional career.
The platform said it will charge a one-off five per cent facilitation fee to cover its regulatory and transaction costs for administering the loan.
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