Definition:
Murabaha is a sale contract where the seller discloses the cost and profit margin to the buyer. In a Murabaha financing arrangement, Tayseer buys an asset and sells it to the client at a profit, with a deferred payment plan.
How We Help:
Through Murabaha, Tayseer Finance can help individuals and MSMEs acquire goods or assets by purchasing them on the request of the client and reselling them at an agreed-upon profit margin. The client can pay the sale price in instalments over the agreed period of time. Thus allowing the MSMEs to scale their operations without significant upfront costs and allowing individuals to acquire the goods they desired through an easy payment plan. The clear, predetermined profit margin ensures transparency and no hidden fees.
Definition:
Ijara refers to a leasing agreement where one party leases an asset to another in exchange for rental payments. Ownership of the asset remains with the lessor, but the lessee has the right to use the asset during the lease period.
How We Help:
For MSMEs, Tayseer Finance can offer Ijara financing to lease equipment, machinery, or other essential assets. This allows businesses to use the equipment necessary for growth without having to make a large upfront investment. After the lease period, MSMEs can return the asset or acquire ownership depending on the agreement.
For individuals, Ijara can be used to finance the leasing of home furniture appliances, or electronics, providing immediate access without full purchase costs upfront.
Definition:
Wakala is an agency contract where one party (the principal) appoints another (the agent) to carry out a certain task on their behalf. In finance, it allows one party to act as an intermediary to manage investments or assets on behalf of another.
How We Help:
Through Wakala, Tayseer Finance can provide funding to MSMEs, by appointing the client as agent to invest funds in his business and generate profit for Tayseer capped at certain agreed profit rate. This allows clients to grow their businesses without engaging in non-Islamic financial activities.
Definition:
Mudarabah is a partnership where one party provides the capital, while the other provides expertise and management. Profits are shared according to a pre-agreed ratio, while losses are borne solely by the capital provider unless there is negligence by the manager.
How We Help:
Tayseer Finance can provide Mudarabah financing to MSMEs by offering capital for their business while the MSMEs manage the business. Profits are shared based on an agreed-upon ratio, incentivizing both parties to maximize returns. This structure benefits MSMEs looking to expand but lacking the capital to do so. It also ensures the entrepreneur is not burdened with debt in case of losses, as long as there is no negligence or misconduct.