OBSTACLES IN IMPLEMENTING ISLAMIC BANKING OPERATIONS FOR FINANCING OFF-PLAN SALE PROJECTS IN ALGERIA.
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Abstract
While various commercial banks have successfully established mechanisms to finance housing projects through installment sales under Law No 11-04, Islamic banks still to seek the most effective Sharia-compliant financial solutions that protect their interests and facilitate the process of providing property loans to real estate developers and purchasers within the installment sales framework. This research paper aims to explore various Islamic financing methods and identify the obstacles that hinder their application in financing off-plan sale projects.
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References
A- Laws and decrees:
-Regulation No 20-02 dated 15/03/2020, which defines banking operations related to Islamic banking and the rules of its practice by banks and financial institutions, Algerian official journal No 16, dated 24/03/2020.
-Law No 86-07 dated 04/03/1986, repealed, related to real estate promotion, Algerian official journal No 10, dated 05/03/1986.
-Legislative Decree No 93-03 dated 01/03/1993, repealed, relating to real estate activity, Algerian official journal No 14, dated 05/03/1993.
-Law No 11-04 dated 17/02/2011, amended and supplemented, which specifies the rules governing the activity of real estate promotion, Algerian official journal No 14, dated 06/03/2011.
-Law No 23-09 dated 21/06/2023, amended and supplemented, containing the Monetary and Banking Law, Algerian official journal No 43, dated 27/06/2023. Rescinds Order 03-11 related to Cash and Loan.
-Executive Decree No 10-167 dated 30/06/2010, amended and supplemented, related to the modalities of determining the rate of interest rate reduction on loans granted to real estate agents contributing to the achievement of public housing programs and the modalities of granting them, Algerian official journal No 41 dated 04/07/2010.
-Executive Decree No 13-389 dated 24/11/2013, which determines the levels and modalities of granting a reduction in the interest rate on loans granted by banks and financial institutions for the acquisition of collective housing and the construction of rural housing as well as individual housing to be completed in the form of a complex in specific areas in the states of the South and the Upper Hills, Algerian official journal No 61 dated 08/12/2013.
-Executive Decree No 13-431 dated 18/12/2013, which specifies the two models of the contract of reservation of right and the contract of sale on designs for real estate properties, as well as the limits of payment of the price of the property subject of the contract of sale on designs and the amount of the penalty of delay and its terms and methods of payment, Algerian official journal No 66, dated 25/12/2013.
B- Books:
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C- Theses:
-L.Boumaraf, The role of the interveners in financing the projects of the promotional housing supported in the Algerian legislation, thesis submitted to obtain a doctorate third stage (LMD) in law, specialization of real estate law,2022/2023, University of Batna 1, Algeria.
-F.Aroura, Mechanisms of Investing Funds in Islamic Banks, Master of Laws Memorandum, Business Law Branch, 2007/2008, University of Algiers, Algeria.
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D- Articles in a scientific journal:
-D.Kareche, “Profit Controls and Eligibility Factors in Islamic Economics and Their Relationship to Risk - An Analytical Descriptive Study,” Journal of Social Sciences and Humanities, Volume 13, Issue 26, 19-46, University of Batna 1, Algeria, published on 01/06/2012.
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-M.R.Djeldjal, "Islamic Finance System for Medium and Small Enterprises, Journal of Comparative Legal Studies", Volume 7, Issue 1, 117-134, University of Chlef, Algeria, published on 28/06/2021.
E- Websites:
-From the Islamic Banking website: www.marefa.org/Islamic_bank/simplified.