Design of Islamic Financial Certificates for Housing Development in Algeria

Abstract

Algeria depends solely on publicly produced housing. Algeria’s
housing industry has been lagging behind in its development. This has caused
many citizens to struggle with finding proper housing. Aside from being one
of the highest countries in terms of rent rates, construction and distribution of
public houses in Algeria takes more than 15 years of waiting. Despite that the
quality of the housing is bad. This paper proposes Shari’ah-compliant housing
certificates, a new Islamic financial instrument that would assist in house
construction in Algeria. This instrument uses Istisnaʽ as the underlying contract
and accommodates guaranteed returns as well as negotiability for investors. It
has great potential in contributing to solving the prolonged problem of housing
in Algeria as well as countries facing problems in financing the construction of
housing.