Murabaha

If you are looking at financing for purchase of raw material, goods and merchandising as well as export financing and Import financing, then Murabaha is best suited for you. Murabaha is a commonly known Working Capital Finance widely used in Islamic Banks. Murabaha refers to sale where the seller discloses the cost of commodity and the amount of profit charged. Thus it is not a loan given on interest rather it is a sale of commodity at profit. The mechanism of Murabaha is that upon your request, the Bank purchases commodity as per your requirements and sells to you at cost-plus-profit basis. Therefore, the Bank, rather than advancing money to you, buys the goods from third party and sells them to you on profit.