Residential Mortgages


The World Bank estimates that in Kabul alone investment of $2.44 billion will be needed for rehabilitation and new construction. The goal of Afghanistan Islamic Mortgages (AIM) is to make home ownership a reality for millions of Afghans by establishing the first home financing program in the country. Homeownership is a fundamental catalyst for creating social and political stability and propelling economic growth by engendering a greater sense of citizenship. Individuals who own their home are likely to feel greater responsibility for their neighborhoods, have greater commitment to their communities, and feel more motivated to maintain and improve private and public space. Currently homeownership in major metropolitan centers is limited to those who have inherited their home or have gained access to large sums of money. The majority of the middle class, who are young, professional, and returnees from neighboring countries, are forced to rent. This creates the potential for social and political instability. There are two major challenges associated with home financing in Afghanistan: i) developing a reliable systems that will work in Afghanistan’s unique environment; and ii) developing a financing system that is Sharia compliant. AIM is in position to meet both challenges and develop a fresh innovative product to fill this gap.

The main product product provided by Afghanistan Islamic Mortgages is the Declining Balance Co-ownership Program. Under the terms of a Declining Balance Co-ownership Program, one does not repay an interest-bearing loan. Instead, one becomes a co-owner with an “investor” (local bank), from whom one acquires full ownership through affordable monthly payments. Each payment is made of two elements. The first portion is a charge, or a “Profit Payment,” that gives one the exclusive right to the use of the property. The remaining portion of the monthly payment allows one to acquire an increasing share of ownership in the home until you own it completely. In the case of a home purchase, one’s initial share of ownership in the property is determined by your initial investment.

Financial Benefit

The demand for new homes is estimated at 1.25 million units and growing at a rate of 5 percent annually, with the majority of the concentration in urban centers. At this rate, the potential market is between $20 and $60 billion USD.


The technical approach to establishing AIM entails: i) working with regulatory bodies to establish and amend current mortgage laws, ii) developing an innovative mortgage model for the unique environment of Afghanistan by utilizing current Islamic financing practices, working with the government to develop citizen benefits based on the sell of natural resources, seeking partnerships with large employers, and developing community resource accounts; iii) establishing a Sharia council made up of leading Afghan and international Islamic scholars specializing in Economics who will ensure that the final product is Sharia compliant; iv) developing relevant technology to facilitate ease of operations; and v) implementing program.


Afghanistan Holding Group is developing a facility that will act as a high level intermediately fund that partners with retail partners and banks to provide long term capital for affordable wholly Sharia compliant mortgages. The facility provides long term secured credit lines to local partner agencies and banks who will provide application processing and mortgage management. In addition, the facility is partnered with Da Afghanistan Bank in developing the framework for all the legal and technical pre-requisites including a Sharia Board, titling, appraisals, credit checks, and so on.


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