ISLAMIC BANKING

Cover

islamicbanking-microfinance-inner11.jpgMurabaha: Cost-plus transaction

Purchasing goods for borrowers and charging a fee or mark-up.Our business model envisions Murabaha to be our leading service. Small business owners have diverse needs and as we plan to enter different markets the products our customers will demand will be numerous. From small fishing vessels, farm equipment, fuel, fertilizers and other goods. This service will allow the small business owners to carry on their business with a reliable source of credit.

Mudaraba: Partnership

A limited liability partnership
Due to the fact that there are many people in Somaliland who have the technical skills to operate a small farm or open a small fishing company who lack the finances to do so. MicroDahab believes in the future a product line that employs someone who has the technical skills to apply his knowledge and experience to a company while receiving the capital needed from MicroDahab can be started.
This model is allowed in Islamic Finance as the losses are borne by the financier and any profits are shared.

Musharaka: Investment

A joint venture with profit and loss sharing.
Further to our Mudaraba product line which focuses on bringing funding to people who have the ability and skills to start a business but with no capital. Musharaka is a similar but slightly different service, this envisions providing some funding to individuals who already have some capital but need more financing. In our Musharaka service Microdahab will partner with small business owners who want to expand their business but do not have sufficient capital. This model of funding removes the burden from the lender if there are losses and if profits are made then they are shared.

 

 

 

 

Salam: Forward Saleislamicbanking-microfinance-inner11.jpg

An advance purchase of goods delivered on a future date set by the buyer and seller.
Somalia has great swaths of arable land, this is currently used by small scale farmers who produce vegetables and fruits that are consumed throughout the country. Salam is a way for farmers to receive funding prior to their harvest. This is done by entering an agreement with Microdahab, where a certain amount of produce of a certain quality will be purchased when harvest is complete. In exchange MicroDahab pays the entirety of the fee for buying the produce in advance.

Ijara: Lease

Leasing of goods with a second contract to purchase them at the end of a lease period.
Ijarah is another service provided by Microdahab as a tool to assist our customers who own small business. This is especially applicable in the farming and fishing industries. Equipment such as water pumps for farms, fishing vessels and other farm equipment are expensive to purchase and most small business owners cannot afford them. By providing these individuals with the opportunity to rent or lease these assets with an option to purchase they can avail these resources in expanding and growing their businesses