It aims to educate and regulate kosher lending in the UK
The Jewish Lending Institute, an organisation designed to educate and regulate kosher lending within the UK financial services sector, has been launched.
Torah and Jewish Law provide that money lent from a Jewish-owed lender to a Jewish borrower cannot be lent with interest charged. However, this is not being observed when money is lent commercially from a lender without a document called a Heter Iska.
A Heter Iska is a Jewish religious compliance document which is used where a lender and borrower are both of the Jewish faith. Under this, the lender and borrower enter into a partnership rather than a conventional loan arrangement, and 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.
Maxim Cohen (pictured), founder of The Jewish Lending Institute, said he had seen an increased demand for kosher lending and found that there were no clear guidelines to help lenders wanting to adhere to these laws.
“That is why I founded the Jewish Lending Institute,” stated Cohen, who is also a finance specialist and chief executive of the mortgage advisory firm, The UK Adviser Group. “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-owed lenders to become Heter Iska compliant, and also help borrowers identify lenders that are offering ‘kosher’ lending.”
Cohen added that the organisation is now developing an interactive website where borrowers and brokers can search for lenders that offer a Heter Iska.
