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News Code: 1058

 

UK Mulling 'Shariah-Compliant' Student Loans

The country’s University and Sciences Minister David Willetts announced plans to develop the Sharia-law compliant student loan during a speech in London on Thursday.

The proposed system will allow those who hold religious beliefs forbidding them from accumulating interest to be able to access student loans.

Speaking at a Universities U.K. conference, David Willetts said: "Sharia-compliant student loans will also give universities access to a wider pool of talent and help the U.K. get the higher level skills we need to secure long-term economic growth."

The proposed system has been opened up to consultation; the U.K. government wants to hear views on whether this is an acceptable alternative to the conventional system of student borrowing.

The proposed loans will not only be open to Muslim students but to anyone who holds similar financial principles on interest. This is not the first time Sharia-compliant financial services have been on offer in the U.K.; some banks offer Sharia-compliant mortgages as well as other loans.

The intention to develop Sharia-compliant student loans was announced by Prime Minister David Cameron last year. When speaking at the World Islamic Economic Forum in London, he said he wanted to make the U.K. one of the "great capitals of Islamic finance."

Source: ABNA