In contrast, the share of institutional financing in that investment, the level of financial intermediation is surprisingly small. These constraints limit investment in serviced land and housing, in spite of comparatively high prices and strong demand. The lack of a developed system of financial institutions in MCs is another serious limitation imposed upon the sector. In short, tackling this issue is significant , and it has to strike a balance between the need for finance for householders at reasonable conditions in terms of costs as well as in terms of maturities from one hand, and the viability of financial institutions from another hand. There is an ongoing strong trend towards securitization of investments in housing sectors for the purpose of establishing housing units.
Governments are nowadays encouraging private sector to extend mortgage finance.
Dependence on the public social development organizations and on charity organizations has not solved the problem of housing in several countries including the developed economies. Official statistics of the IDB reveals that populations of the Muslim world are above one billion - 1017 million Muslims. One of the studies on 'Housing in African Muslim Countries' uncovers that Muslims there would need above 10 million housing units within the nearer future. In addition to the sharp decline of governments' financial assistance in housing sectors, there is a declining trend in real savings among Muslims as they live in economies faced with rising inflation rates. The theoretical part focuses on nature of the housing finance problem, and how it could be resolved in agreement with Islamic principles.