Daily Personal Finance Insights – Beware of loan-sharks

Daily Personal Finance Insights – Beware of loan-sharks
24 March 2013

Crowdfunding start-ups with Islamic Finance

The founders of Shekra, believe Islamic Finance and crowdfunding work in tandem and have launched what they claim is the first Shariah-compliant crowdfunding platform.

Rushdi Siddiqi, global head of Islamic finance & OIC countries for Thomson Reuters and a board member of Shekra says: “There is a bias towards real estate and equity in compliant [established companies], you also have some commodity funds, and so on. But in the area of venture capital, which is what the essence of Islamic finance is supposed to be about – partnership and risk-sharing, there is very little activity.”

Shekra has around 70 investors, and the co-founders said they are working out a partnership with one of the biggest business associations in Egypt to bring in several hundred others into the network. Instead of charging companies a percentage of the money raised, Shekra takes an equity stake in the start-ups, which goes along with the principle of risk-sharing in Islamic finance. It also takes a “minimum” fee for services provided. 

“Shekra” can be translated as: “partnership in an idea,”

UAE Ministry of Interior warns of loan sharks

According to a report in 999, a monthly magazine of the Ministry of Interior, loan sharks continue to victimise cash-strapped UAE residents despite strict laws against the practice. The report indicates: “The UAE loan shark community has a macabre nickname: the blade mafia. This refers to both the cut-throat rates of interest and the actual use of a blade as a tool of loan recovery.”  

Pay your traffic fines in installments

Abu Dhabi has made it easier for motorists to clear their traffic fines. The opportunity is available to individuals, both Emiratis and non-Emiratis, whose vehicles are registered within the Abu Dhabi emirate, including Al Ain and the Western Region.

The scheme is not valid for companies or organizations that have racked up fines.

Individuals may pay 50% of the fines outstanding, but only if they have multiple fines - the balance must be paid within 12 months and may be in instalments. Note: there is a time limit on applying to pay in multiple instalments.

When a landlord may increase rent in Dubai

The Land Department of Dubai has clarified the situation regarding when a landlord may increase rent. “In Dubai, a landlord can only increase the tenant’s rent if it is equal or less than the market value by 26% or more, as per an Index issued and updated by RERA, provided the landlord gives a 90-day notice period:

If current rent is lower than the Index by 26 to 35%, the increase will be 5%
36 to 45%, the increase is 10%
45 to 55%, the increase is 15%
Over 55% the increase should be maximum of 20%

The increase is due every year from the first renewal.”

There is a very useful Rental Increase Calculator which can be accessed on line at: dubailand.gov.ae

“In case of dispute, The Dubai Municipality Rental Dispute Committee should be approached, provided the rent lease agreement is registered in Ejari.”

Comments

  • Colin
    Colin
    2013-04-07T15:43:46

    Speaking about the loan sharks, Rashid Tahlak, a Dubai-based criminal lawyer at Rashid Tahlak Advocates and Legal Consultants.

    said in The National:  "UAE law prohibits this kind of money lending and it is illegal to demand the borrower's passport or anything else for this illegal transaction,"


    He said the public could report a loan shark to the police.



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Head of Behavioral Finance
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