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Sharia Compliant Finance

The government has been looking in to the possibility of an alternative Sharia-compliant funding system which would be available alongside traditional student loans.

Sharia-compliant financial services guarantee that money held in these accounts is not invested in industries such as gambling, alcohol or weapons manufacturing.  The proposed 'Takaful' fund would not be interest based, but would result in identical repayments to the current student loan system.

A public consultation found that many Muslim students felt unable to attend university because of the current loan system. To help wide participation in higher education the government has made an agreement to developed an alternative student finance product. This agreement has received preliminary approval from Al Rayan Bank's Sharia (formally Islamic Bank of Britain) supervisory committee.

Further information is available in the green paper Fulfilling our potential Teaching Excellence, Social Mobility and Student Choice and the white paper Success as a Knowledge Economy.