Project Financing, Expansion & BMRProject Financing, Expansion & BMR

Project Financing, Expansion & BMR

A strong corporate sector plays a pivotal role in economic growth of the country. Bank Alfalah Islamic caters its corporate customers in the long term financing for Infrastructure Development and Industrial Projects. The major Shari’ah Compliant modes used for long term financing are:

a. Alfalah Ijarah

Bank Alfalah offers Shari’ah Compliant finance facility ‘Ijarah’ the rental based mode of Islamic finance to corporations, which cater the needs for medium to long term asset financing, project financing, plant & machinery etc. In the context of Islamic banking, an Ijarah contract can be understood as an arrangement/contract whereby one party (Lessor) agrees to transfer the benefit of use of an asset to another party (Lessee) for an agreed period at an agreed consideration.

b. Alfalah Diminishing Musharakah

Corporate Diminishing Musharakah is an Islamic medium to long term finance facility which caters for customers in need to finance fixed and movable assets (E.g. land, factory, and building), long term projects and etc. The concept of Diminishing Musharakah allows bank and customer to participate in joint ownership of a Shari’ah compliant asset. The bank’s share is divided into units which are purchased by the customer periodically thus increasing his/her (customer) share in the partnership until the ownership is fully with the customer. Meanwhile the bank charges rent on the portion of asset owned by it (bank).

c. Sukuk

We at Bank Alfalah offer Shari’ah Compliant banking solutions based on Sukuks. Sukuk is the Arabic plural of the word ‘Sakk’ which represents certificate. These are certificates of equal value representing undivided shares in ownership of tangible assets, usufruct and services. Sukuk is centered on the concept of asset monetisation, which can either be issued on existing or specific assets that shall be available at a future date. Sukuk as Islamic securitisation can also help in managing liquidity in the same manner as Treasury bills/bonds are used in the conventional market.