Today saw the launch of the UK’s first Shariah-compliant bridging lender, Birmingham and London-based Offa.
The lender, which will operate in accordance with recognised universal Islamic and ethical financing principles, launches with a £20m funding line provided by a Shariah-compliant UK financial services institution.
Offa is also in advanced talks with another Islamic finance institution for an additional £100m of funds to accommodate the expected strong demand for the UK’s first Shariah-compliant bridging loans.
Offa will lend in all corners of the UK and is headed up by Tarek Kallel, Head of Business Development, Haris Akhtar, Head of Investments and Bilal Ahmed, Head of Operations — and previously CEO and co-founder of Signature Private Finance.
Ahmed left Signature Private Finance specifically to set up Offa with his co-founders, who also have extensive experience in real estate investment and financial services.
Initially, Offa will provide Shariah-compliant residential and commercial bridging facilities with a maximum FTV (Finance to Value) of 75% and 65% respectively — for more information, see the table below.
|Product||Loan Size||Max FTV*||Loan Term||Rate pm**|
|Residential Bridge||£100k–£10m||75%||1–12 months||1%|
|Commercial Bridge||£100k–£10m||65%||1–12 months||1%|
*Finance to Value ** the equivalent % rate were the product a loan
In the near future, Offa will also be launching a refurbishment, stretched development, planning and shared risk ethical finance facility (a 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. Procuration fees of up to 2% will be payable to introducers.
Bilal Ahmed, Head of Operations, Offa, 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, Head of Business Development, Offa, 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.”