Islamic Contracts and Structures

Line of Finance – Structures (Murabah/Wakala)

Line of Finance – Structures (Murabah/Wakala)

Video from The Islamic Corporation for the Development of the Private Sector (“ICD”) presenting the structure of Murabah/Wakala as used in Line of Finance.   »

Sharia Finance Contract Structures

Sharia Finance Contract Structures

Sukuk structures in accordance with the principles of Shari’ah are the same as the principles which apply to other products in Islamic law and finance. Real world case studies and guides produced by Latham and Watkins, and Linklaters. »

The Main Financial Instruments

The Islamic finance industry has developed a wide range of Shari’ah-compliant financial products. To ensure that they meet this specification, they make use of contracts acceptable under traditional Islamic legal doctrine and also adapt conventional financial contracts so that they comply with the tenets of the Shari’ah. »

Ijara

An Ijara contract is a contract of exchange which is popular due to its similarity to a conventional lease. Ijara contracts are used in Islamic Banking, Project finance as well as in Sukuk. »

Murabaha

Murabaha is a contract of exchange based on sale-and-purchase contracts with a predetermined cost and profit. The seller states the cost he has incurred on the asset to be sold and sells it to another person by adding some profit or mark-up to the buyer. »

Istisna

Istisna is a contract of participation, whereby the funding party agrees to deliver a commodity or an asset at a pre-determined future time at an agreed pre-determined future time at an agreed price. »

Mudharaba

Mudaraba is a contract of participation, a partnership where capital is provided, in cash or assets (no debt is accepted) by one party - the fund provider. »