Convinient financing solutions for business in accordance with the principles and rules of Sharia

The Commodity Murabaha is a financing transaction based on purchase and sale, whereby the Bank purchases a commodity from a broker and sells it to the Customer through the Murabaha agreement with a set markup either in the form of a lump sum or percentage. After signing the Murabaha agreement, the Customer sells the commodity to a third party broker through the Bank, which acts as the Customer’s messenger.

The subject of the Commodity Murabaha sale cannot be gold or silver.

How it works:

• The Bank purchases commodities from broker number one for the amount of the requested financing with immediate payment and delivery of the commodities, the subject of the Murabaha. Ownership is transferred to the Bank, and the Bank will bear all of the commodity ownership risks.
• The Bank and the Customer enter into the Murabaha agreement for selling the commodities with a markup either in the form of a lump sum or a percentage (Deferred Sale Price) for immediate delivery of commodities and deferred payment. After the Murabaha agreement has signed the ownership of the commodity passes to the Customer.
• After taking possession of the commodities, the Customer sells them through the Bank (as messenger) to broker number two according to the terms of immediate delivery and payment. The Bank acts as a messenger by delivering the Customer’s offer of sale to broker number two.
• After completing the sale, the Bank credits the proceeds from the sale of the commodities received from broker number two to the Customer's account.
• The Customer pays the deferred sale price to the Bank according to the agreed payment schedule.

Terms and conditions according to the Sharia:

• Restricted commodities: gold, silver, currency
• The goods must be owned by the Bank before the conclusion of the Murabaha Agreement.
• The Bank is obligated to disclose to the Customer the cost price of the commodity and related expenses, including the Bank’s profit, whether  lump sum or percentage.

Financing criteria:

• Any sector of the economy is financed, except for tobacco and alcohol production, gambling, the production of weapons and ammunition, and other industries that do not comply with the principles and rules of the Sharia;
• The company must have existed for at least three years. Stand-alone beginning projects are not financed, except for projects involving state and quasi-state structures;
• The project owner must contribute at least 20% of the cost of the investment project;
• The company should not have arrears in servicing banks;
• Finance terms: up to seven (7) years, depending on the type of project and the specifics of the industry;
• Financed business should have been profitable within the last three (3) years.​