Murabahah Term Financing
A contract between buyer and seller under which the bank/seller sells certain specific goods to the customer/buyer at a sale price based on cost plus agreed profit payable in cash or on any fixed future date in a lump sum or by installments. The agreed profit may be fixed in a lump sum or in a percentage of the cost price of the goods. All the expenses incurred by the seller in acquiring the goods are included in the cost price.
Unique Features
Murabaha Term Financing is financing granted for working capital and/or for the acquisition of commercial and related purpose fixed assets to be repaid within a specific period of time with a profit. The financing is repaid in a lump sum on maturity or in periodic installments (i.e., monthly, quarterly, semi-annually, or annually), depending on the nature of the business and its cash flow. The bank extends Short-Term Murabaha Financing, Medium-Term Murabaha Financing, and Long Term Murabaha Financing.