Islamic banking is often criticized for focusing solely on the needs of the affluent where complex products designed primarily to line the pockets of the bankers are commonplace.
However, the Pakistani division of US-based chipmaker Intel is working with Pakistan's Meezan Bank to utilize Islamic finance to bridge the digital divide and at the same time offer Islamic finance to the masses with a financing program for laptops built around Intel's second generation core processor.
The financing will be done through a Musawamah contract with repayment between three and 24 months, with payments as low as PKR100 ($1.15) per day. Meezan Bank did not respond to a request for the equivalent profit rate of the financing.
Musawamah is similar to Murabahah, with the difference that the cost of the good and the profit margin are not disclosed. The financing offered by Meezan Bank comes with a two-year warranty as well as Takaful protection to cover damage and theft of the laptop.
In a press release, Intel Pakistan's country manager, Naveed Siraj, said the program was designed to: "Bridge the digital divide and extend the benefits of computing to as many people as possible."
A spokesperson for Intel told The Islamic Globe that the company had provided similar conventional financing for laptop purchases in other emerging markets like the Philippines, but this was their first entry into Shari'ah compliant finance.
Initially the financing was designed to target the consumer market, but a spokesperson for Intel said that Meezan had started to offer the same scheme to businesses as well. It is laudable for well recognized American companies to offer Islamic financing for their products in emerging markets where limited access to the latest technology for the masses can hamper development.
The spokesperson did not address questions posed by this paper on whether Intel was considering bringing the Islamic financing offer back home to consumers and small businesses in the US.
© The Islamic Globe 2011
