We provide financing to our clients through different modes of contracts below;
Profit and Loss sharing contracts;
Mudharabah (profit sharing)
Mudharabah is an Islamic financing arrangement where one party provides the capital (Rab-ul-Maal), and another party manages the business or investment (Mudarib). Profits generated are shared based on a pre-agreed ratio, while losses are borne by the capital provider, encouraging prudent investment and risk-sharing.
Musharakah (Joint Venture)
In Musharakah, two or more parties collaborate to jointly finance a business venture. Profits and losses are shared based on an agreed-upon ratio, and all partners, whether providing capital or expertise, actively participate in the management of the venture. It emphasizes shared responsibility and fosters a cooperative approach to economic activities in Islamic finance.
Debt-Like Financing Structures;
Murabahah (cost plus finance)
In Murabaha, Islamic banks facilitate asset financing by purchasing a desired asset on behalf of the customer and then selling it to the customer at a mutually agreed-upon cost-plus profit, allowing the customer to pay in installments over an agreed period.
Ijarah (Lease Financing)
Ijarah involves Islamic banks leasing an asset to the customer for a specified period, during which the customer makes periodic lease payments. At the end of the lease term, ownership of the asset may be transferred to the lessee, or the customer may choose to purchase it at a predetermined price.
