UK’s first shariah-compliant home finance provider gains authorization
Offa, the UK’s first Shariah-compliant finance provider, received approval to offer Islamic home purchase plans
LONDON (MNTV) – The Financial Conduct Authority (FCA) granted Islamic fintech firm Offa authorization to offer Shariah-compliant alternatives to traditional residential mortgages in the U.K.
This move positions Offa as the third active provider of Home Purchase Plans (HPPs) in the U.K. market.
This approval marks the first time in over seven years that the FCA has licensed a newly-authorized entity to provide HPPs, underscoring the significance of Offa’s achievement in the Islamic finance sector.
Founded in 2019, Offa is a trailblazer in the U.K.’s Shariah-compliant finance space.
It became the country’s first Shariah-compliant bridging finance provider and also launched the first Shariah-compliant buy-to-let (BTL) product.
HPPs are a key alternative to conventional home loans, applying the principles of co-ownership and leasing under Islamic finance.
Unlike traditional mortgages, which charge interest, HPPs involve customers acquiring a property in partnership with the lender and gradually increasing their share of ownership through monthly payments until full ownership is achieved.
Offa’s model aligns with Islamic finance principles, avoiding interest charges and ensuring investments are free from sectors deemed harmful, such as alcohol, tobacco, and the arms trade.
This ethical approach is central to Offa’s mission and service offering, with the company aiming to modernize Islamic finance by using tech-driven, paperless systems to provide fast, accessible services.
Offa’s recent acquisition of Bank of Ireland’s Alburaq Shariah-compliant home finance portfolio, which included over 350 HPPs, further strengthens its presence in the U.K. market.
The company’s senior leadership, bolstered by Gulf Islamic Investments’ majority stake acquired in 2022, brings decades of expertise to the growing field of the U.K. Islamic finance.
This FCA authorization not only expands Offa’s ability to serve U.K. customers seeking ethical and Shariah-compliant home finance but also offers greater confidence in the company’s adherence to regulatory standards.
Offa is poised to play an increasingly important role in the U.K.’s Islamic finance landscape.
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