Islamic fintech joins market as third active provider of Sharia-compliant home finance
The Financial Conduct Authority (FCA) has authorised Offa, an Islamic property finance fintech, to provide home purchase plans (HPPs), a Sharia-compliant alternative to traditional mortgages, across the UK.
With this approval, Offa is set to become the third active provider of HPPs in the market. The company, which has expanded through acquisitions, new hires, and product launches, believes this is the first time in over seven years that the FCA has granted such a licence to a newly authorised entity.
Offa was the first provider of Sharia-compliant bridging finance in the UK and previously introduced the country’s first Islamic buy-to-let product.
“This is a significant and hard-won milestone for us at Offa,” said Sultan Choudhury (pictured), executive chairman at Offa. “The real winners, of course, will be our customers, who will now gain greater access to our fast and easy Islamic home finance services thanks to our modern, tech-driven and paperless systems.”
Choudhury added that Offa aims to modernise Islamic finance by integrating technology to eliminate excessive paperwork and streamline processes.
Riaz Husain, chairman of Offa Money, said the FCA’s decision reinforces the company’s regulatory compliance.
“Receiving this authorisation from the FCA will provide reassurance to our customers that Offa is adhering strictly to regulations as we provide high-quality, faith-based Islamic home finance products to aspiring property investors and landlords across the country,” he said.
Islamic home purchase plans operate on a co-ownership-with-leasing model, where customers gradually increase their stake in the property through monthly payments until full ownership is achieved. The same principle applies to Sharia-compliant BTL financing, with payments funded through rental income instead of interest charges, which are prohibited in Islamic finance.
Offa recently expanded its portfolio by acquiring Bank of Ireland’s Alburaq Sharia-compliant home finance division, which included over 350 HPPs. The deal involved a unique funding structure to support the acquisition.
The fintech firm follows ethical finance principles, avoiding interest-based transactions and investments in industries such as alcohol, tobacco, animal testing, and the arms trade.
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