Islamic Modes of Agricultural Financing By Muhammad Khaleequ

Top 20 FREQUENT WORDS

murabahah 52 salam 48 price 28 islamic 23 sale 22 delivery 20 modes 20 payment 18 purchase 17 client 15 commodity 14 contracts 13 financing 13 goods 12 contract 11 instruments 11 theory 11 agent 9 deferred 9 parallel 9 production 9 promise 9

DOCUMENT KEY POINTS

• islamic modes a agricultural financing areas of financing including crop production a working capital short term a c crop production purchase of inputs ie seeds fertilizers pesticides etc

• islamic modes a agricultural financing areas of financing including crop production a term financing medium and long term a c farm mechanization purchase of tractor and farm machinery for tillage sowing planting pesticide application harvesting threshing etc
• murabahah ijarah a c transport purchase of trailers reefer vans milk cooling chiller tanks carriers motorcycles pickups of feed raw material birds chicks vaccination medication utensils etc

• islamic modes a agricultural financing areas of financing including crop production a term financing medium and long term a c poultry farming construction of breeding hatchery farms utensils feed mills transport distribution vehicles slaughtering processing etc
• murabahah dm a c fish farming catching construction of fish ponds hatcheries purchase replacement of fishing boats engines and related facilities equipments construction of cold storage etc

• price of subject must be certain risks and responsibilities attached with the subject must transfer from seller to the purchaser as a result of sale
• subject must be in ownership of seller a physical or constructive possession exception in salam and istisna

• shariah legitimacy of murabahah a c qura an surah ale imran a it is no crime for you to seek the bounty of your lord verse surah al baqarah a allah has permitted trade verse a c sunnah the prophet pbuh purchased a she camel from abu bakr raa for use as transportation from medinah

• theory practice of murabahah execution of murabahah urboun securities offer to purchase bank client acceptance of offer receipt possession report sec
• deposit hamish jiddiyah dp note i R payment of murabahah price murabahah price bank client murabahah terminates

• a c murabahah facility days a c payment lump sum a c rate of profit six months kibor a c freight of cost of goods a c securities pledge of feed stock post dated cheques
• theory practice of murabahah purchase of poultry feed stock a c murabahah transaction rs

• theory practice of murabahah pricing of murabahah example particulars amount rs
• freight insurance of cost total cost x profit p

• it is a type of sale in which the price known as the salam capital is paid at the time of contracting while the delivery of the item to be sold known as subject matter of salam al muslam fihi is deferred
• islamic modes instruments sale contracts salam defined a salam transaction is the purchase of a commodity for deferred delivery in exchange for immediate payment

• islamic modes instruments sale contracts salam shariah legitimacy i allh says o ye who believe when you deal with each other in transactions involving future obligations in a fixed period time reduce them to writing al baqara verse i ibn abbas reported the prophet pbuh came to medina on hijrat and found that people were selling dates for deferred delivery salam over a period of one or two years
• the prophet pbuh said whoever pays for dates on a deferred delivery basis salam should do so on the basis of specified scale and weight bukhari and muslim

• or usufruct imam malik a c debt not recognized as salam capital a c sale in case of commodities satisfying condition of fungibility dhawatul amthal quantity be specified exactly a c standardized production of companies can also be treated as salam commodity a c product of a particular field or farm cannot be sold under salam
• islamic modes instruments sale contracts conditions of salam a c salam is a binding contract a c full price at spot otherwise selling debt for debt exception a upto days a c salam capital price in principle be in cash however it can also be fungible commodities wheat etc

• islamic modes instruments sale contracts conditions of salam a c certain date and place of delivery a c the commodity should remain in the market throughout the period of contract different opinions a c time period for delivery should be sufficient to allow use of salam capital conveniently and effect prices preferably be at least days different opinions a c subject matter of salam can be exchanged with other goods only after the date of delivery as long as this replacement is not the part of contract
• but market value of exchanged goods should not be more than the market value of salam goods

• islamic modes instruments sale contracts salam procedural alternatives a c the banks face limitations in receiving commodities and selling them in the market a c banks can overcome the limitation by establishing a subsidiary to undertake this task a c banks can adopt parallel salam or third party sales to avoid this situation a c banks can appoint the client its agent to sell the commodity
• the agency agreement should be separate from the salam agreement a c if agent has been able to sell the commodity at a price more than the one stipulated in agency agreement he is entitled to get the difference

• therefore the original seller cannot be entered into the parallel salam a c if one party breaches its obligation the bank has no right to refuse delivery of goods in parallel contract a c the third party giving unilateral promise should not pay the price as this is not allowed in shariah
• salam and parallel salam must be independent of each other otherwise it becomes two sales in one contract a c parallel salam is allowed only with third parties

• islamic modes instruments sale contracts difference between salam and murabaha salam murabahah delivery of good is deferred good is delivered at spot price is paid at spot payment of price is deferred price has to be paid in full price can be paid on spot or differed lump sum or in installments salam is not executed in the murabaha can be executed in commodity of particular particular commodity
• specifications or the commodity from particular origin

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DOCUMENT WORD ANALYSIS

Main Category

AlHuda Material\islamic micro

KeyWords

islam finance bankable contract client profit purchase financial asset microfin risk sale transact price murabahah busi sharia goodasset payment invest

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DOCUMENT REFERENCES

Number of Pages

34

Published Date

2016-09-17 00:48:15

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