theprogressive.com vs. Halal Financial Institutions

Comparing theprogressive.com to halal financial institutions is like comparing apples and oranges, but it’s a critical exercise for anyone committed to Islamic finance principles.

Read more about theprogressive.com:
theprogressive.com Review & First Look
theprogressive.com Cons
Does theprogressive.com Work?
Is theprogressive.com Legit?
Is theprogressive.com a Scam?
How to Avoid Interest-Based Transactions (Riba)
theprogressive.com Pricing

The fundamental difference lies in their very foundation: one operates on the conventional interest-based (Riba) system, while the other adheres strictly to Sharia (Islamic law) in all its dealings.

Theprogressive.com (Conventional Building Society): theprogressive.com Pricing

• Core Business Model: Riba-based. Earns revenue from interest charged on mortgages and loans, and pays interest on savings deposits.
• Product Offerings:
  • Savings Accounts: Instant Access, Regular Savers, Cash ISAs, Bonds, Children’s accounts – all bearing interest.
  • Mortgages: First Time Buyers, Remortgage, Self-Build, Holiday Home – all conventional loans with interest payments.
• Profit Generation: Profit is primarily generated through the differential between borrowing and lending rates (interest rate margins).
• Ethical Framework: Follows conventional Western financial regulations and ethical standards, which permit interest.
• Risk Sharing: Minimal. The lender (building society) assumes little risk beyond default, while the borrower bears the primary burden of interest payments regardless of the project’s success.
• Transparency: High, in terms of disclosing rates, fees, and terms according to conventional standards.
• Customer Base: General public, without specific adherence to religious financial guidelines.
• Community Involvement: Engages in charitable activities and local community support, but these are separate from its core Riba-based financial operations.

Halal Financial Institutions (e.g., Islamic Banks, Islamic Investment Funds):

• Core Business Model: Sharia-compliant. Aims to avoid Riba, Gharar (excessive uncertainty), Maysir (gambling), and investment in prohibited industries (e.g., alcohol, tobacco, adult entertainment, conventional arms).
• Product Offerings (Examples):
  • Savings/Investment Accounts: Often based on Mudarabah (profit-sharing) or Wakalah (agency) contracts. Customers are investors, and returns are shared profits from permissible investments, not fixed interest.
  • Home Financing: Based on Murabaha (cost-plus-profit sale), Ijarah (leasing), or Musharakah Diminishing (co-ownership with gradual acquisition). These are asset-backed transactions, not interest-based loans.
  • Ethical Investment Funds: Portfolios screened for Sharia compliance, investing in permissible sectors and companies.
  • Takaful: Mutual insurance where participants contribute to a fund for shared risk.
• Profit Generation: Profit is generated from tangible assets, real economic activity, and ethical trade. Risk is shared between the institution and the customer/investor.
• Ethical Framework: Guided by Sharia law, overseen by a Sharia Supervisory Board to ensure compliance in all products and operations.
• Risk Sharing: Integral. In profit-sharing models, both parties share the profits and losses, promoting fairness and genuine partnership.
• Transparency: High, often with additional transparency on Sharia compliance and investment screening processes.
• Customer Base: Primarily Muslims seeking faith-based financial solutions, but also attracts ethical investors from other backgrounds.
• Community Involvement: Often includes Zakat (charity) management and social responsibility initiatives as an integral part of their business model, stemming from their ethical foundation.

Key Differentiating Factors:

• Source of Returns: Theprogressive.com’s returns on savings are fixed interest (Riba). Halal institutions’ returns are shares of profits from permissible investments.
• Nature of Mortgages: Theprogressive.com offers conventional interest-based loans. Halal institutions offer asset-backed sales or leasing agreements.
• Underlying Ethics: Conventional institutions operate on secular financial ethics. Halal institutions operate on divine ethical principles of Sharia.
• Sharia Supervisory Board: Halal institutions have an independent board of scholars to ensure compliance. conventional institutions do not.

In conclusion, while theprogressive.com is a legitimate and transparent conventional financial institution, it operates on principles fundamentally at odds with Islamic finance.

For a Muslim, choosing between the two is not merely a preference for one financial product over another, but a decision rooted in adhering to religious obligations and seeking financial well-being through permissible means.

How to Avoid Interest-Based Transactions (Riba)