Synthesis of three contracts

• Purchase under joint ownership
• ijarah or leasing
• Waad Bil Buy; which means promise to purchase the proportionate share of the asset of the bank by the client
• Sale and transfer of ownership to the Client.

In Short

• This is a product under the Shariah contract of Shirkat and Ijarah.
• To procure or to construct the asset jointly by the bank and the client under Musharakah Contract.

• The client will give a promise to the bank to purchase the bank’s proportionate share of undivided Musharaka asset at an agreed price.

• Usually long term nature.
• Financing for any types of non-fungible (fixed type) asset(s) which is/are Shariah Compliant.

Salient Features

• This is a mode of finance used for long term/project finance requirement of the client.
• The exact ownership of both the bank and Client must be recognized.
• The ownership is usually transferred to client after the rental period.
• Client has to pay a fixed rental throughout the rental period with principal amount.
• At the end of financing period, Client will be the sole owner of the asset subject to paying the full price of the bank’s asset.
• Takaful Insurance /Maintenance cost will be borne by the bank and the client jointly in proportion to their ownership in the Musharakah Asset.

Following products are available under DMF