ISTISNAA Definition ISTISNAA is a business contract under which one party requests another to manufacture or construct a work for a fee payable in advance, on a fractional basis or term. This is a variant similar to the MUSAWAMAH contract, except that the object of the transaction is the delivery, not of goods purchased as […]

Modaraba Definition The Modaraba is a contract of sale at cost price plus a known profit margin agreed between buyer and seller. The Modaraba can have two aspects: Direct transaction between a seller and a buyer, (The Tripartite transaction between a final buyer or a first seller and an intermediary seller (executing the purchase order). […]

Musharakah Definition The Musharakah is an association between two or more parties in the capital of a company, project or operation by means of an apportionment of the results (losses or profits) in agreed proportions. It is based on the client’s morality, the relationship of trust and the profitability of the project or operation. The […]

IJARAH or lease financing is a lease of property with a promise of sale for the benefit of the lessee. This is a relatively recent financing technique involving three main players: The supplier (manufacturer or seller) of the good The lesser (in this case the bank that buys the property to rent it to its […]

MUSAWAMAH can be defined as a sales contract with deferred delivery of the goods. Thus, unlike Modaraba, the Bank does not intervene as a seller on credit of the goods acquired on command of its relationship, but as a purchaser, with cash payment of a commodity that will be delivered to it by its partner. […]