Islamic banking is the product of collective effort of bankers, economists and Muslim scholars over the past several decades to develop financial solutions that meet the requirements of Shari’a-compliant finance. It is a rapidly growing industry that is expanding worldwide with a positive outlook despite the ongoing challenges in the dynamic world economy and the global financial environment. All transactions under Islamic banking are based on the principle that funds do not generate funds, unless they are coupled with an activity or work. Islamic banking promotes risk sharing between provider of capital and the user of funds, and it aims at maximizing profit yet within Shari’a restrictions. At Maisarah, our Shari’a Supervisory Board ensures full compliance to Islamic financial system from products development to administering transactions.
"Ijarah" is a term of Islamic Fiqh. Lexically, it means 'to give something on rent'. It is a Shari’a-compliant alternative to conventional leasing where Maisarah acts as a Lessor and the customer acts as a Lessee. The Lessor (Maisarah) allows the Lessee (customer) to use the asset owned by the Lessor in return for a monthly rent. Using Ijarah as a financing instrument, Maisarah purchases the item required for leasing and receives title of ownership from the vendor. Maisarah leases the asset to the customer after execution of lease agreement. The customer makes periodic rental payments as per the contract. At the end of the lease agreement, Maisarah transfers the ownership to the customer through a sale transaction.
Murabahah is a sales transaction where Maisarah purchases the commodity and sells it to the customer on cost plus profit basis. The price can be paid by customer on deferred payment basis.
Diminishing Musharakah is a partnership contract whereby Maisarah and customer purchase a tangible asset (like property/ real estate) in proportion to their respective capital contribution. Maisarah rents out its share in the asset to the customer who gradually purchases the share from Maisarah.
Mudarabah is a partnership contract between a capital provider and an entrepreneur. The entrepreneur is provided with funds by the capital provider to undertake a business activity. Any profits made is shared between the capital provider and the entrepreneur according to the pre-determined profit-sharing ratio. However, losses shall be borne by the capital provider provided loss in not due to the entrepreneur negligence.
Wakalah Bil Istithmar is an investment agency that involves appointing another person/ party to invest and grow one’s wealth in Halal transactions, with or without a fee.