Launch of The Jewish Lending Institute
The Jewish Lending Institute has been launched to “educate and regulate kosher lending within the UK financial services sector”. The organisation has been founded by Maxim Cohen, an award-winning finance specialist and CEO of the mortgage advisory firm, The UK Adviser Group.
According to the Torah and Jewish Law, money lent from a Jewish-owned lender to a Jewish borrow cannot be lent with interest charged. This presents a problem, when money is lent commercially from a lender without a document called a “Heter Iska”. The “Heter Iska” was developed as a mechanism to address this challenge. The lender and borrower enter into a partnership rather than a conventional loan arrangement. Instead of charging interest, the lender becomes a partner in the borrower’s business venture or investment. The lender’s funds are treated as capital invested in the partnership, and the borrower assumes the role of the active partner managing the business operations.
Cohen, also an ordained Rabbi, has seen an increased demand for “kosher” lending and found that there were no clear guidelines to help lenders wanting to adhere to these laws. Cohen says “That is why I founded the Jewish Lending Institute. There is not a day that goes by that I don’t speak with Jewish lenders who want to offer “kosher” lending but don’t know what to do or how to do it. We are working with leading rabbinic experts to make it easier for more Jewish-owned lenders to become “Heter Iska” compliant and also help borrowers identify lenders that are offering “kosher” lending.
The Institute is also developing an interactive website where borrowers and brokers can search lenders that offer a Heter Iska .