Islamic Finance - Creating economically viable financial products
To make the financial product economically viable, various more components must be incorporated in order to address the aforementioned problems. Among others, these include the following: (a) a commitment made by the customer to buy a certain asset from the financier after the financier purchases the assets from the vendor in order to prevent the customer from breaking the terms of the agreement and to safeguard the financier. (b) The financier would only buy the required asset from the vendor upon the customer's request and assurance. The traditional Murabahah is transformed into a financial Murabahah, known as Murabahah li al-Amir bi al-Shira or "Murabahah to the purchase orderer," by these two extra components. The use of contracts to contemporary Islamic financial products and services is demonstrated by examples of this Murabahah and parallel Istisna' facility.
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