May 25, 2006 (LBO) – Sri Lanka’s biggest leasing company, People’s Leasing, has begun offering Islamic financial products, catering to Muslims who regard interest-based banking as a sin, a top official said Thursday. Muslims make up around 7.5 percent of this tropical island’s population, but local financial institutions have been slow to tailor-make products to tap this vast and prosperous market.
There is untapped potential considering that we have a lot of Muslim businessmen, People’s Leasing Co. Chief Executive, D P Kumarage told LBO.
PLCs specialized unit has got the blessings of the local Muslim community, with seed capital set aside to ensure strict Islamic doctrine is upheld.
Since a soft launch in April, the unit has disbursed over 250 million rupees in leases, ranging from commercial vehicles to machinery.
Islamic finance is based on the concept of not paying fixed-interest returns and speculation, as well as forbidding investments in what Islam considers vices such as dealing in alcohol, pork or gambling.
Instead, Islamic financial units make regular payments to account holders based on profits from approved investments. They also provide small-scale services to replace