Financial Themes

Ijarah (Lease Finance)
A lease agreement, whereby a lessor buys for a customer and then leases it to him over a specific period, thus earning profits by charging rental.

Ijarah Thumma Bai' (Hire Purchase)
The principle of such a contract is that at the end of a lease period, the lessee can buy the asset for a pre-agreed depreciated price.

Ijarah-Wa-Iqtina (Lease-to-Own)
The principle of such a contract is that at the end of a lease period, the lessee becomes the asset owner.

Istisna'a (Factoring)
A contract of acquisition of goods by specification or order, where the price is paid in advance, or progressively in accordance with the progress of a job.

Murabahah (Markup Financing)
A form of credit that enables customers to make a purchase without having to take out an interest bearing loan. The credit union buys an item and sells it to the customer on deferred basis.

Musharakah (Joint Venture)
An investment partnership in which all partners are entitled to share the profits of a project in a mutually agreed ratio.

Sukuk (Islamic Bonds)
An asset-backed bond which is structured in accordance with Shariah.

Wadiah (Safekeeping)
The safekeeping of goods with a discount on the original stated cost. Acting as the keeper and trustee of depositors' funds.

Wakalah (Fiduciary/Trusteeship)
Agency or Power of Attorney. A specific agreement whereby a representative is appointed to undertake transactions on another person's behalf.

Kafalah (Guarantee)
A guarantee in support of a debt transaction in the event of a debtor failing to fulfill his/her obligations.