Structured Finance & Investment
This is a medium of financing designed to meet the needs of clients on a non-interest basis. It is not a loan given on an interest basis by the bank but rather a sale of an asset or commodity at a profit. This is based on the murabaha contract.
Features
- Suitable for manufacturers who need working capital on a relatively short term basis to finance acquisition of raw materials and consumables
- It is also available to finance LPOs of reputable companies
- Import and export transactions of permissible goods are also financed
- It can also be used to finance fixed assets such as commodities, stock and inventory, machines and equipment, automobiles, furniture, consumer goods
- Maximum credit 80% of the value of goods
- Maximum tenor of 180 days
- No form of interest including compound interest
- Flexible repayment tenure
- Fixed profit margin/mark up during the life of the contract
- A clear business plan and up to date records of business operations
- The clients must demonstrate the ability to meet contract terms and conditions on non-Interest banking principles while showing repayment capability based on the details of expected repayment source/cash flow
- Adequate and realizable collateral to mitigate the risk of loss
- Other requirement as specified by the bank
