Students: Loans

Business, Innovation and Skills written question – answered at on 10 March 2014.

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Photo of Greg Mulholland Greg Mulholland Liberal Democrat, Leeds North West

To ask the Secretary of State for Business, Innovation and Skills when his Department expects to implement a system of Islamic student loans.

Photo of David Willetts David Willetts Minister of State (Universities and Science)

The Department for Business, Innovation and Skills has been developing a model alternative finance product which would be Sharia-compliant and could potentially be offered alongside conventional loans to students wishing to attend higher education. This model finance product has been developed by experts in Sharia-compliant finance and has received preliminary approval from the Islamic Bank of Britain’s Sharia supervisory committee. As part of the development process, the Government will shortly seek opinions from the Muslim community, and the wider public, on the acceptability of the alternative finance product under consideration.

Any system for providing Sharia-compliant student loans is unlikely to be in operation before 2015 given the complexity associated with implementing a new model for offering loans.

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