Murabaha Agreement
Shuraako Capital’s Murabaha Purchase Agreement is a sharia-compliant financing arrangement consisting of two distinct parts: First, the Financier (Seller) agrees to purchase specific items listed in the agreement on behalf of the client. Second, those items are resold to the Buyer (Borrower) at a predetermined markup, under agreed-upon terms and conditions. This structure ensures transparency and compliance with Islamic finance principles by separating the purchase and resale transactions.
Purchase of Items
The Financier/Seller shall purchase items listed in Section 3 of this Agreement upon and subject to the following terms and conditions.
Step 1: BUYER/BORROWER
Submits to Financier/Borrower:
- Vendor quote
- Authenticated letter
- Reviewed and signed purchase requisition agreement
Step 2: AGENT & FINANCIER/SELLER
Signs agency agreement
- Authorizing appointed Agent to receive and transfer purchased items from (1) Vendor (2) to Buyer/Borrower (3) on behalf of Financier/Seller
Step 3: FINANCIER/SELLER & VENDOR
Agree upon purchase price
- Definition: original sum paid to procure items
Step 4: VENDOR
Submits to Financier/Seller:
- Invoice addressed to Financier/Seller
Step 5: FINANCIER/SELLER
Receives the invoice
- Submitted by Vendor
Step 6: BUYER/BORROWER
Submits to Financier/Seller:
- Completed and signed vendor payment release declaration to guarantee the Vendor
Step 7: FINANCIER/SELLER
Pay purchase price directly to Vendor
Send written letter to Vendor authorizing transfer of purchase item(s) to Agent
Step 8: AGENT
In the name of and on behalf of Financier/Seller:
- Possess and keep the purchased item(s) received from the Vendor in good working condition until written confirmation from Financier/Seller authorizing transfer of purchased items to Buyer/Borrower has been received
Resale of Purchased Items
Resale of the purchased items to the Buyer/Borrower shall be conducted in accordance with the following terms and conditions:
Step 1: FINANCIER/SELLER
Submits to Buyer/Borrower:
- Written notification indicating procurement of purchased item(s)
- Purchase price of purchased item(s)
- Written offer to resell purchased items at contract price
Definitions: Purchased Item(s) Items purchased under Murabaha finance and listed in Section 3 of Agreement Purchase Price Original sum paid to procure items
Step 2: FINANCIER/SELLER
Provide written authorization to Agent:
- To transfer purchased item(s) to Buyer/Borrower or Agent
Step 3: BUYER/BORROWER & FINANCIER/SELLER
Signs resale contract:
- Effects the transfer of ownership of purchase item(s) from Financier/Seller to Buyer/Borrower
- Prescribes the time, place, and manner of transferring purchased item(s) to Buyer/Borrower
Step 4: BUYER/BORROWER
Receives purchased item(s) upon release from Agent
Step 5: BUYER/BORROWER
From the moment that the Buyer/Borrower or Agent receives or accepts purchased item(s) from Financier/Seller, ownership and all risks of purchased item(s) shall transfer to Buyer/Borrower
