الحياري الإقتصادي اقتصاد سهل يفهمه الجميع
Islamic finance adheres to principles derived from Sharia’ah, which prohibits riba (interest), and gharar (uncertainty). Instead, it promotes ethical and equitable financial transactions. In part 1 of 2, here, we explore three common permissible financing methods:
1. Cost-Plus Sales (Murabahah):
Murabahah involves a sale where the seller (Islamic bank or financial institution) discloses the original cost of an asset to the buyer and adds a mutually agreed-upon profit margin.
In this contract, it is essential that the Islamic bank must own the asset at the time of sale. This ownership distinguishes it from a loan.
While the profit margin is predetermined, the risk of default on payments by the buyer remains.
2. Credit Sales (Bay’ bi-thaman ‘Ajil):
Murabahah transactions often involve deferred payments, creating a credit sale.
It’s essential to differentiate this from riba. The increase in price is justified by the deferment of payment, not by a loan-based interest calculation.
Consider:
A sale for $10 payable in one month is permissible.
Extending the payment by another month and increasing the price to $11 is also permissible, as it’s a sale with a deferred payment.
However, increasing a debt from $10 to $11 for deferment is strictly riba and forbidden.
The implicit annual rate of return from a credit sale can be calculated for comparison with conventional contracts, but the core principle is the permissibility of a higher price for deferred payment.
3. Leasing (Ijarah or Ijar):
Ijarah involves the sale of the usufruct (right to use) an asset for a specified period, not the asset itself.
The Islamic financial institution must own the asset throughout the lease period.
This differs from conventional financial leasing, where a loan for the asset’s present value might be involved, leading to riba.
Islamic leasing ensures Sharia’ah compliance, including:
Requiring the lessor’s permission for subleasing.
Careful handling of late payment penalties to avoid riba.
Ijarah wa Iqtina’ (lease-to-own) is a variation where the lessee has the option to purchase the asset at a predetermined residual value at the end of the lease.
Islamic Banks consider factors like depreciation, inflation and credit worthiness when determining lease payments and residual values.
While an implied interest rate can be calculated for comparison, the contract itself avoids riba.
Look for Part 2 of 2: Permissible Financing Methods in Islamic Finance, in which we will discuss Partnerships, and Islamic Forwards
