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What is Murabahah

Chapter 42
Handbook of Research on Theory and Practice of Global Islamic Finance
A contract of sale practiced by Islamic banks, according to which the bank act as intermediary to provide finance for purchasing goods to a buyer. The bank buys the commodity on case basis then sells it to the client on credit at a markup.
Published in Chapter:
Shari'ah-Based Financial Intermediation
Abdulazeem Abozaid (Qatar Foundation, Qatar)
Copyright: © 2020 |Pages: 20
DOI: 10.4018/978-1-7998-0218-1.ch042
Abstract
Financial intermediation is the core of the banking business, as its role is to mediate between the owners of surplus funds and those in need of finance, sharing the generated profit with the funds' owners. However, financial intermediation does involve some economic risks in terms of concentration of debt in financial institutions and the possibility of the inability of financed clients to repay their debts. When this happens, financial crises are inevitable, as it occurred in 2008. Islamic finance does not differ in this regard from its traditional counterparts, because the concentration of debts also holds on the concept of Islamic institutional finance, and the possibility of collective default is possible as well. The study treats the issue of financial intermediation and its risks from Maqasidi aspect using home finance as a point of comparison between conventional home finance with Islamic home finance in terms of their economic effects. The study eventually proposes a model for home financing that is free of these cautions.
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Chapter 9
Fintech and Shariah Principles in Smart Contracts
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Chapter 4
Empowering Community Through Entrepreneurship Training and Islamic Micro-Financing: Sharing the Experience of IIUM-CIMB Islamic Smart Partnership (i-Taajir)
A n Islamic financing structure in which the seller provides the cost and profit margin for the purchase of an asset. Murabaha is not an interest-bearing loan but is an acceptable form of either cash or credit sale under Islamic law. In the case of credit sale, the buyer does not become the owner of the asset until the loan is fully paid.
Published in Chapter: Empowering Community Through Entrepreneurship Training and Islamic Micro-Financing: Sharing the Experience of IIUM-CIMB Islamic Smart Partnership (i-Taajir); From: Economics, Business, and Islamic Finance in ASEAN Economics Community
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Chapter 15
Financial Accessibility and Small-Medium Enterprises (SMEs) in Malaysia: The Role of Crowdfunding and Islamic Finance
Referred to as cost-plus financing, it is an Islamic financing structure in which the seller provides the cost and profit margin of an asset.
Published in Chapter: Financial Accessibility and Small-Medium Enterprises (SMEs) in Malaysia: The Role of Crowdfunding and Islamic Finance; From: Economics, Business, and Islamic Finance in ASEAN Economics Community
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Chapter 5
Application of Maqasid al-Shariah-Based Public Policy Framework in SDGs Policies: Poverty Eradication (SDG 1) as a Case Study
Is where an asset/product is delivered immediately for the price to be paid on deferred basis based on agreed profit ratio.
Published in Chapter: Application of Maqasid al-Shariah-Based Public Policy Framework in SDGs Policies: Poverty Eradication (SDG 1) as a Case Study; From: Public Policy’s Role in Achieving Sustainable Development Goals
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Chapter 13
Governance and Financial Reporting of Islamic Banks: Evidence From Mauritius
A contract under which an IBI agrees to sell an asset that is in its possession to a customer at an agreed selling price which includes a profit margin.
Published in Chapter: Governance and Financial Reporting of Islamic Banks: Evidence From Mauritius; From: Growth and Emerging Prospects of International Islamic Banking
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