Bai-Murabaha Loan
The term ‘Bai-Murabaha’ has been derived from Arabic words and means purchase and sale and another word means an agreed-upon profit. So, Bai-Murabaha’ means a sale on agreed-upon profit.
Bai-Murabaha may be defined as a contract between a buyer and a seller under which the seller sells certain specific goods (permissible under Islamic Shariah and the Law of the land), to the buyer at a cost plus agreed profit payable in cash or on any fixed future date in lump-sum or by installments. The profit marked-up may be fixed in lump-sum or in the percentage of the cost price of the goods.
By applying the above-mentioned technique Sarokar Saving & Credit Co-operative first purchase the goods and products and establishes its complete ownership and then finally sells to the buyer at an agreed profit to be paid extra buyer who is actually seeking to purchase in credit for a certain period of time.
Motorbike, electronic items like freeze, washing machines, battery and inverters, generators, computers, laptops, city safari, auto-rickshaw, auto pickups, car, tractors, farm trillers, rods, cement and verities of products can be provided under Bai-Murabaha loan.
In Short
- The profit is shared as per agreement.
- Loss born by the client.
- The amount can be paid on an installment basis.
- Duration usually 1-2 year(s).
- Rebate may be given on Early Adjustment.