Islamic finance: paying for piety?

UM Financial came up for Canada’s 1.3 million Muslims with mortgages that don’t charge interest. But its failure last year has started a dangerous debate about whether Islamic banking should be banned, or whether it’s still a potentially lucrative industry in need of better regulation.
Mortgages with UM Financial were set up so that lender and borrower byed the house together. The homebuyer pays rent to the mortgage issuer, while gradually buying off the outstanding share of the property. After it is fully paid, ownership is transferred to the borrower.
Although UM’s troubles were many, for Islamic finance they probably won’t be the last word on a system that will remain in demand with a growing part of the population.