Working Capital Finance:

Working Capital Finance for your short term financing needs

At BankIsami, we understand that your business needs constant access to low cost and flexible financing, in order to meet day-to-day funding needs. Our team of experienced Relationship Managers with wide sector experience offer you effective cash flow management by way of financing arrangements suitably structured to your needs and your risk profile.

Cash is the lifeline of your business. Let your business have a blooming & prosperous life with our Working capital finance facility. To fulfill your working-capital financing requirements, BankIslami offers a wide range of products as follows:

Murabahah Financing: Murabahah is a type of sale in which the seller discloses the cost of goods and profit to the buyer. Through this short-term financing mode, BankIslami can finance the ‘asset-purchase requirement’ of the Corporate Customers.

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Running Musharakah: Running Musharakah, being a Shariah compliant alternative to the conventional Running Finance facility, is based on ‘Shirkat-ul-Aqd’ rules (i.e. profit and loss sharing arrangement). The Bank participates in the operating activities of the Client and shares profit and loss as per the actual performance of the business.

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The Customer, intending to utilize the Murabahah facility, identifies the commodities (‘assets’) it needs to purchase through Murabahah facility. BankIslami purchases the assets from Supplier and then sells the same to the Corporate Customer against an agreed price (including disclosed profit portion) on deferred payment basis.

Tijarah Financing: Tijarah Financing product aims at fulfilling working capital requirements of the Clients. In this transaction, BankIslami Pakistan Limited (‘BankIslami’) purchases assets/goods, that are available for sale, from the Client against an agreed purchase price on spot basis. BankIslami then under separate arrangement appoints the Client its Agent to sell the goods in the market at a higher price to earn its desired profit.

Istisna Financing: Istisna is a contract of sale of specified items to be manufactured/constructed, with an obligation on the part of the manufacturer/seller to deliver them to the buyer upon completion.

Istisna can be used for made-to-order commodities where the buyer (BankIslami) would order a specific good with some specifications to be manufactured by the Corporate Client in a particular period of time and deliver to BankIslami after completion.

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Salam Financing: Salam is a sale, whereby, the seller undertakes to supply some specific commodity to the buyer at a future date in exchange for an advanced price fully paid on the spot. As a matter of principle, the sale of a commodity which is not in the possession of the seller is unlawful. Thus, the practice of Salam is legalized as an exception and is allowed under certain terms and conditions.

Salam is allowed for commodities only which are homogeneous and fungible in nature i.e. every unit of the commodity should be identical and substitutable in nature e.g. sugar, rice, wheat etc. Therefore, Salam is an ideal mode for financing for agricultural concerns. Salam financing can also fulfill all working capital requirements of manufacturers/traders dealing in homogeneous commodities.

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Long Term Finance:

Project Finance for your Medium & Long term financing needs

BankIslami offers medium and long-term financing facilities for infrastructure, BMR and industrial projects in all sectors directly or on syndication basis.

Ijarah: Ijarah is a contract, whereby, BankIslami will lease out an asset to the Corporate Client and receive periodical rentals from the Client for the use of that asset. The asset will remain in the ownership of the Bank throughout the term of Ijarah. At the end of the Ijarah term, the asset can be purchased by the Client at an agreed price.

Ijarah is mainly used for long and medium term fixed asset financing for infrastructure, BMR and industrial projects.

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Diminishing Musharakah: The product of Diminishing Musharakah is offered on the basis of ‘Shirkat-ul-Milk’. Shirkat-ul-Milk means partnership of persons in an undivided property. Process of Diminishing Musharakah financing involves BankIslami taking share in the ownership of a specific asset along with the Corporate Client and then gradual purchase of the Client of BankIslami’s ownership share in the asset through out the term of Diminishing Musharakah. At the end of the Diminishing Musharakah term, Client becomes the sole owner of the asset.

Diminishing Musharakah is mainly used for long and medium term fixed asset financing for infrastructure, BMR and industrial projects. Diminishing Musharakah is also an ideal mode for Real Estate Financing.

To Understand the Difference between Diminishing Musharakah and Conventional Long Term Financing kindly click