Murabaha (Cost-Plus Financing)
An Islamic financing structure where the bank buys an asset and sells it to the client at cost plus a disclosed profit margin.
Detailed Definition
Murabaha is an interest-free Shariah-compliant sales contract widely used by Islamic banks for auto, equipment, and commodity financing. Unlike a conventional loan that charges interest on money lent, the financier acquires title to the tangible asset and resells it on deferred installment terms with fixed mark-up.
Have questions about Murabaha (Cost-Plus Financing)?
Ask our zero-LLM database query engine for historical data, conversions, or impact on Pakistan markets.
Related in Islamic Finance
Sukuk (Islamic Bonds)
Shariah-compliant debt instruments representing fractional ownership in tangible assets.
Takaful (Islamic Insurance)
A cooperative system of mutual guarantee and risk pooling adhering strictly to Shariah principles.
Nisab
The minimum threshold of qualifying wealth an individual must possess before Zakat is due.