Istisna’ is a sale transaction structure of contract where a commodity is transacted before it comes into existence. It is an order to a manufacturer/contractor to manufacture/construct a specific commodity/asset for the purchaser.
Tag Archives: Islamic Finance
MURABAHA – Cost plus Financing
Murabaha is currently the most widely used Islamic sharia compliant mode of finance, used by Islamic sharia-compliant financial institutions: it is as simple as buy an asset for the customer; sell the asset at a premium (profit), allow payment of the sale price in instalments to the customer. That is a Murabaha. A Murabaha isContinue reading “MURABAHA – Cost plus Financing”
What is MUSHARAKA?
Definition and classification of Musharaka The literary meaning of Musharaka is “sharing”. The root of the term “Musharaka” in Arabic comes from the word “Shirka”, which means ‘being a partner’. Under Islamic jurisprudence, Musharaka means; “a joint enterprise formed for conducting some business in which all partners share the profit according to a specific ratioContinue reading “What is MUSHARAKA?”
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