Major bank extends Islamic finance eligibility

NAB has reported that its Islamic financing for businesses grew by 28 per cent in the year to September 2024 as more business customers sought out more tailored financing opportunities.

In response to this, NAB has announced that it has extended the range of financing options for Muslim customers, who can now use Islamic financing to acquire another business, purchase equipment, and buy livestock and are no longer required to use property as security.

The product offers a minimum of $5 million for commercial property development and construction purposes in order to fund the purchase of commercial property and land along with the aforementioned options.

NAB’s head of Islamic finance, Dr Imran Lum, said that there’s been a growing interest from business customers in this type of financing as the major bank saw steady growth since its launch in 2021.

“More Muslim Australians are looking for business funding that fits their values and beliefs. The growth we’re seeing shows just how much this offering has resonated with these customers,” Lum said.

“The Muslim community is so young and entrepreneurial, often living in fast-growing areas, and this finance option provides them with the support they need to take advantage of new business opportunities.”

NAB’s Islamic finance is designed to adhere to both Australian and Islamic legal requirements and is structured as a lease-to-own, where rent and service fee charges are paid in lieu of interest.

The lender is currently the only Australian major bank to offer a shariah-compliant solution to help Muslim-owned businesses grow. The offering has also been signed off by the Amanie Advisors shariah board.

According to the major bank, NSW has led the growth in Islamic businesses, increasing by 54 per cent from September 2023 to September 2024, followed by Victoria at 34 per cent and Queensland at 8 per cent.

“We’re proud to be the only major Australian bank offering specialised Islamic financing for businesses, and we’re excited to make it available to more customers,” Lum said.

“Not every business has property to use as security, that shouldn’t stop them from accessing the finance they need to grow.

“It’s also not just Muslim-owned businesses that are benefiting from this product. In many cases, we have financed non-Muslim businesses that have requested this type of financing because they have a Muslim partner or investors with a preference for Islamic financing.”

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Adrian Suljanovic is a journalist at Broker Daily with more than two years experience reporting on all facets of the third party distribution channel.

Adrian has written for a range of business and finance titles including IFA, Investor Daily and Lawyer’s Weekly before joining the mortgages team in 2022.

He graduated from the University of Wollongong in 2021 gaining a Bachelor of Communication & Media with a major in Digital & Social Media.

E-mail Adrian at: This email address is being protected from spambots. You need JavaScript enabled to view it.