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The Needy (Miskeen) Fund

The LARIBA RF finance and servicing model long ago stipulated that any late fees collected from chronic and abusive customers of the compassionate posture of the RF system be used to help others who are needy and are struggling to honor their obligation. As such, the M-fund was established as a nonprofit entity that supports charitable causes. One of such causes is to help people who have lost their jobs or have endured an unexpected financial hardship that prevents them, despite their best efforts, from making their payments on time. These customers apply in confidence to the M-fund and receive a charitable benevolence loan (a qard hassan basis) to the amount of their needs to help stay current on their obligations and not adversely impact their credit until their fortunes improve. The benevolent loan is paid back without any increase when the customer is in a position to do so without impacting their financial well-being.

At the LARIBA System, many needy customers have been discretely helped to help them overcome adverse financial situations. Circumstances in which the M-fund came to the rescue include medical emergencies, unemployment, and family emergencies.

Loan Documentation Philosophy and Approach

The LARIB A RF finance model has designed the processes, the documentation, and the legal processes to comply with the laws of the land without violating the Judeo-Christian-Islamic Shari'aa law. It should be clearly known that it is not our mission in the RF finance domain to change the laws of the land. We are challenged by offering RF products and services that comply with the laws of the land while not violating the Judeo-Christian-Islamic Shari'aa law. The LARIBA RF finance model is also designed to be keen on protecting the rights and obligations of RF clients in case of adverse situations. In order to apply our mission of providing RF financing to all people, we do not wish to create unnecessary structured and engineered financial products that do not add any value or legal advantage to the transaction but, in fact, cause excessive legal fees, unnecessary limited partnership fees, and in most cases insert unusual language in the contracts that could make them look “Islamic” but renders these contracts irregular and difficult to pursue legally.

The documentation package was designed to be seamless and not different when it is compared to a regular mortgage package to make sure that client rights are protected in case of legal dispute. To supplement the regular loan documents, which include the word interest as allowed by many highly placed moderate and conservative scholars in the law (Shari'aa), a rider called the LARIBA Finance Agreement is used:

1. The LARIBA Agreement (rider), which describes the LARIBA RF finance process followed and the development of and arrival at the agreed-upon rental value used as the basis for our LARIBA RF finance model application and calculation of the monthly payment.

2. Late fee rider, which describes the guidelines and rules of the charging and dispensing of the late fees.

3. Standard American mortgage industry and regulatory sanctioned financing note and deed of trust/mortgage.

4. Standard industry and legal disclosure forms.

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