Murabaha

Murabaha (Arabic مرابحة, Murabaha DMG ) is a commonly used in Islamic finance financing instrument that is in conformity with the Sharia. In this case, the bank acts as a middleman between buyer and seller. "The bank is buying on behalf of their customers goods from a third party, which she then later their customers with a surcharge, which shall include the cost and profit markup, resold. "

Forms of Murabaha

In practice, one finds various forms:

Murabaha is therefore a kind of trade financing and makes, according to a company specializing in Islamic finance lawyer for nearly 80 per cent of Islamic banking from. In the Koran, economic activity is expressly permitted, riba (interest), in some places translated as usury, does not. A Murabaha Stores Department would in any case be equated with the exchange of goods for money and is therefore not prohibited. The main difference between Murabaha and a normal loan business, however, is that the profit margin of the bank a time-independent payment for the service provided, such as the search for the most attractive price for the product and the settlement of the purchase represents.

Murahaba is an honest statement from the vendor on the cost of the goods and is mainly applied by banks under the Islamic banking to make the customer clear that the deals are not subject to usury. Typical business in which Murabaha is used are:

• Asset financing
• Real Estate Financing
• Microfinance
• Import / export financing

Due to the fixed deposit sum the investors are guaranteed a minimum profit margin. In contrast, the Mudaraba income between the investor and the borrower is divided on a contractual basis, so that in times of no inflow is recorded without making profit.

Criticisms

Controversial, however, is to what extent it is indeed an interest-free instrument in Murabaha, because as with a "real credit ", the mark-up is based on reference rates such as LIBOR and the creditworthiness of the customer.

Umar Ibrahim Vadillo The scholar also criticizes that Murabahaverträge according to the authentic Islamic Fiqh than two sales in one - are to be considered - and thus as prohibited. Correctly, Murabaha is merely a sale. When practiced by the banks variant, however, the bank buys already in the order of the customer, the actual purchaser.

Another point of criticism is that the bank can be covered as a buyer and seller numerous risks, so that practically no risk of loss for them, for example, the value of the asset should change.

How a real estate purchase by Murabaha

Property acquired after Murabaha

• Find a suitable property by the buyer
• Negotiation between the buyer and seller about the price of the house
• Request of the buyer to the bank, whether a Murabaha contract can come into existence
• Review of the Buyer to his credit and the house on its value
• If all conditions are met, following the purchase of the house by the bank directly by the seller
• The Bank is first owner of the house and increases the selling price by a predetermined amount and the buyer known
• Sale of the house by the bank to the buyer. Buyer pays monthly installments to the bank
• Thus, no interest shall have been paid by the buyer

Accordance with the Sharia and the market

The contractually agreed upon Murabaha premium of usually a few percent off the original price is in line with the Sharia. Because these are not officially at interest, but by the rate of return from economic performance. This legal and also ( basic ) tax issues are connected in Germany. Thus, some laws have to be changed to make Murabahavorgänge for the Islamic population in Germany possible.