Inventory financing

Fatawa Question

Dear Dr Kahf, Salaam Alaykum Wa Rahmatullah Wa Barakatuh. Thank you for your response. I have two questions: 1) Can you please clarify the inventory financing option in more details. I understand it but what contracts have to be entered into and what would the transaction dynamics have to be to make it compliant ? 2) A variation of the equity buy-back question. Is it possible for us to invest equity in a business at say $ 1 per share and have a pre-agreed sale of the equity back to the company / other shareholders at the same price $ 1 in installments over a period (in other words a kind of predetermined rights issue or bonus share program with a promise to buy from the other shareholders ? At the same time could you have Murabahah / Ijarah financing at a price that compensates. Naturally the equity investment attracts any dividend paid out over the period but limits downside risk (except for company risk) and also limits upside risk. Is this permissible ? I was wondering if you have been able to make any progress on the Takaful act review. Many thanks, Hajara

Fatwa

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Publication Date

2009-05-20

Main Subjects

Financial and Accounting Sciences
Religion
Islamic Studies

Topics

• Islamic jurisprudence
• Contracts
• ٌLeasing
• Price policy
• Interdependence
• Financing
• Investments
• Stocks
• Resale on profit
• Conditional sale
• Vendors and purchasers
• Stock
• Payments
• Revenue

No. of Pages

2

Data Type

Fatawa

Language

English

Record ID

BIM-734358

• APA
• MLA
• AMA