Access to Own Dwelling through Ijarah at Islamic Banks and State-Owned Housing Scheme in Pakistan

  • Naseem Razi Associate Professor of Law, FSL., International Islamic University, Islamabad, Pakistan
  • Rashida Zahoor Assistant Professor, Department of Law, University of Sahiwal, Sahiwal, Pakistan
  • Muhammad Asif Safdar Assistant Professor, Principal of Gillani Law College, Bahauddin Zakariya University, Multan, Pakistan
  • Jibran Jamshed Assistant Professor, Department of Law, Islamia University of Bahawalpur, Pakistan
Keywords: Housing and Development, low-cost housing, finance,ijarah, house financing Pakistan


Purpose: Access to a safe dwelling is one of the necessities of life and an indicator to reveal the economic development of a country. In Pakistan, however, the majority of the people do not have their dwelling rather have to spend their life in renting homes or in slums. To overcome the housing shortfall, the State Bank of Pakistan has pronounced a low-cost housing scheme for the poor and the low-income segment of the society while the Islamic banking sector also offers ijarah facility to purchase or to construct own dwelling and claims to work in the objective of Islamic legal system. Therefore, this study aims to analyze critically,  ijarah and state-owned low-cost housing scheme from the public insight.

Design/Methodology/Approach: This research aims to utilize analytical, theoretical, and empirical methods of research rather than some combination thereof by utilizing experimental reasoning based on naturally occurring data, reports, and surveys. To evaluate ijarah and government housing scheme from public insight, a survey of 100 salaried persons has been conducted by way of the questionnaire at different companies in  District Rawalpindi.

Findings: This study found that Pakistan is suffering from the acute issue of lack of own dwelling. The result of the conducted survey reveals that the majority of the employed people showed more trust in the state-owned housing scheme than ijarah at Islamic banks.

Those people showed their interest in the state-owned housing scheme than ijarah at Islamic banks.

Implications/Originality/Value:  The practical approach to ijarah at Islamic bank found in trust deficit concerning the public insight. That ijarah does not provide low-cost homes to the homeless people, hence not serving by Shari’ah. The current policy of the state provides an opportunity to ijarah to facilitate poor people by softening its terms and conditions and by way of qard-e-hasanah. 


Download data is not yet available.

Article Analytics Summary


Aaron, H. J. 1999. Shelter and Subsidies. Washington: The Brooking Institutions.

Ahmad, Yusuf. 1994. Contemporary Experience of Islamic Banks: A Survey, in Elimination of Riba from the Economy. Islamabad: Institute of Policy Studies.

Al- Yubi, Muhammad Sa῾d bin Ahmad.1998. Maqasid al-Shariah al-Islamiyyah ‘Ila qati ῾ uha bil ‘Adillah.

Alfred Marshall. 1980. Principles of Economics. Cambridge: Cambridge University Press.

Allama, Shibli Nu’mani. 1989. Al-Farooq: Biography of Umar. Lahore: Mansoor Publications.

Aristotle. 1956.The Nicomachean Ethics. trans., H. Rackham M. A. London: William Heinemann Ltd.

Asian Development Bank. Key Indicators for Asia and the Pacific.( 2018). Country Tables @

Ashmawi, Muhammad Sa῾id. 1987. Usul al-Shari῾a. Beirut: Dar Iqra᾿.

Barker, R. G. 1946. The Politics. trans. Oxford: Oxford Press.

Ben B. Seligman. 1962. Main Currents in Modern Economics. New York: Free Press.

Brown & Egon. 1994.The Traditional Centrally Planned Economy and its Reforms in Comparative Economic Systems: Model and Cases. ed., Morris Bornstein, Homewood: Irwin.

Campbell, T.S., and Kracaw. 1993. Financial Institutions and Capital Markets. New York: Harper Collins.

Center, Budget and Policy Priorities. (2017). Policy Basics: public housing.

Collingsworth, J. B. 1976. English Housing Trends. London: Allen & Unwin.

Djermakoyo, IS.1979. The Search for New Economic Order. London: Islamic Council of Europe.

Erikson, A. B. (1985). Social Justice and Public Policy.UK: Wheat Sheaf Books.

Esping Anderson. 1992. The Three Worlds of Welfare Capitalism. Cambridge: Polity Press.

Gilbert, Neil. 2002. Transformation of the Welfare State: The Silent Surrender of Public Responsibility. Oxford: Oxford University Press.

Greenbaum and Thokar. 1990. Contemporary Financial Intermediation. New York: Dryden Press

Hayek, Friedrich. 1978. A New Studies in Philosophy, Politics, Economics and the History of Ideas. Chicago: University of Chicago Press. DOI:

Ibrahim Warde. 2006. Islamic Finance in the Global Economy. Edinburg: Edinburg University Press.

Imran, Umer Chhapra1, Afzal Ahmed,, Raja Rehan, and Farasat Hussain. July 2018.“Consumer’s Preference and Awareness: Comparative Analysis between Conventional and Islamic Ijarah Auto Financing in Pakistan”. Al-Iqtishad: Jurnal Ilmu Ekonomi Syariah .Journal of Islamic Economics. Volume 10 (2), July 2018. P-ISSN: 2087-135X; E-ISSN: 2407-8654 Page 389 – 402. DOI:

Irene Dingeldey and Heinz Rothgang, eds. 2009. Governance of Welfare State Reform. UK: Edward Elger Publishing.

Islamic Banking Bulletin. September 2018. State Bank of Pakistan. @ Accessed on 11-09-19)

Jeffery, R., Frieden. 2006. Global Capitalism: Its Fall and Rise in the Twentieth Century. New York: W.W. Norton & Co.,

Jensen, M. C. 1992. Studies in Theory of Capital Markets.New York: Praeger.

John Commons. 1967. Institutional Economics: Its Place in Political Economy.Madison: University of Wisconsin Press.

Kidwell, D.S., Peterson, R. L. and Blackwell. 1995. Financial Institutions, Market and Money. New York: Dryden Press.

Local Authority Building Control Survey. UK. 2018.

Micael Harrington. 1976. The Twilight of Capitalism.New York: Simon & Schuster. DOI:

Mohd, Razali Agus. 2002. The Role of the State and Market in the Housing Sector. Journal of the Housing and the Built Environment. Vol. 17, No. 1. DOI:

National Model. Economic Development and Cultural Change, Vol. 32, No. 4. 749-766. @

Nicholas Bullock. 2008. 20, 000 Dwellings a Month for Forty Years: France ‘s Industrialized Housing in the 1950s. The Construction History Society, Vol. 23, pp.59-76.

Nousheen, Abbas Naqvi and Anila Perveen. 2014. Analysis of Growth of Ijara Investment in Pakistan:A case study on Meezan Bank. KASBIT Business Journal (KBJ), Vol. 7, No.2, 21-34, December 2014. Last accessed on 12-09-19.

Pakistan, Economic Survey. 2017-18. Islamabad: Ministry of Finance. @

Pakistan, Bureau of Statistics Report. 2018.

Population and Housing Census. 2017; Census 1998 and 2018.

Paul Samuelson. 1965. Economics: An Introductory Analysis, 4th ed. New York: McGraw-Hill, 1965.

Philippe, Annez, and William Wheaten C. July 1984. Economic Development and Housing Sector.

Razi, Naseem. (2016). Transformation of Islamic Economics into a Global Economics: An Analysis in the light of Capitalist and Socialist Systems of Economics. International Journal of Sciences: Basic and Applied Research (IJSBAR), Vol. 30, No 3. 265-282, ISSN 2307-4531.(

Razi, Naseem. (December 2014). Socio-Ethical Dimensions of Islamic Economy and Issue of Modern Interest and RIBA: An Analysis in the Light of the Economy of the Muslim World. Journal of Islamic Banking and Finance. DOI:

Razi, Naseem. Family Planning as National Policy in Pakistan: An Analysis from the Perspective of Shari’ah. Pakistan Journal of Islamic Research, Vol 12, No. 3.21-42.

Razi, Naseem. Dec. 2014. Islamic Banking System and Mode of Leasing: A Comparative Analysis in the Light of Maqasid al-Shari’ah. Cultural and Religious Studies, Vol. 2, No.6, pp. 349-359. DOI:

17265/2328-2177/2014.06.005. UK: David Publishing Co.

Robert A. Haugen. 1997. Modern Investment Theory.UK: Prentice-Hall International.

Rodney Wilson. 1997. Economics, Ethics and Religion. London: Macmillan Press Ltd. DOI:

Rosser and Rosser.1996. Comparative Economics in a Transforming World Economy. USA: McGraw Hill Inc.,

Severyn T. Bruyn. 1991. A Future for the Market Economy: The Social Market.Stanford: Stanford University Press.

State Bank of Pakistan Report. ( 2010). THE PAKISTAN INFRASTRUCTURE REPORT. Pakistan: Karachi.


State Bank of Pakistan. 2019. Policy for Promotion of Low-Cost Housing Finance 2019-2021. Islamabad: Infrastructure Housing & SME Finance Department.@ file:///C:/Users/care/Desktop/Book%20on%20Islamic%20Finance/Policy-Promotion-Low-Cost-Housing-Finance.pdf

Suranyi-Unger. 1980. The Economic Philosophy of the Twentieth Century. Northern Illinois: University Press.

Tatiana, Nenova. (2010). Expanding Housing Finance to the Underserved in South Asia: Market Review and Forward Agenda, India: New Delhi.@ ( DOI:

Towner, R.H. 1977. Religion and the Rise of Capitalism. Hammond’s worth.

Todaro, Michael P. 2000. Economic Development. 7th Ed. Longman, Inc.

United Nations Development Report. (2018).

United Nations Database on Household Size and Composition. (2017).

United Nations Development Program. (2018). Human Development Report Pakistan. Islamabad: 4th Floor, Serena Business Complex, Khayaban-e-Suharwardy, Sector G5 –1, 2.

US Census Bureau, Current Population Survey. March 2018. Annual Social and Economic,

Vinay D. Lall. 1987. Budget and Housing Sector. Economic and Political Weekly, Vol. 22, No. 15. pp.671-675.

World Bank Group. (November 2018). Pakistan Economic Development Update. Making Growth Matter. At

Yadav, B. S.2009. Virendra Sing and Nandini Sharma. 2008. Economic Reforms and Poverty Alleviation, New Delhi.

How to Cite
Naseem Razi, Rashida Zahoor, Muhammad Asif Safdar, & Jibran Jamshed. (2021). Access to Own Dwelling through Ijarah at Islamic Banks and State-Owned Housing Scheme in Pakistan. Journal of Accounting and Finance in Emerging Economies, 7(1), 9-22.