Give 10 advise how you get the money to pay your debt (etc) or inject money...

Give 10 advise how you get the money to pay your debt (etc) or inject money purpose from Islamic Finance instruments? Tawaruq & Sukuk etc

Expert Solution

Financing methods which are compliant with Shariah laws is called Islamic finance.

In Islamic finance, funds are raised via various contracts/instruments. These are:

1. Mudaraba - A person gives money to another person for investment in business. Any gains of such businesses are shared.

2. Musharaka - Both the parties contribute entreprenurial abilities, money and other resources. Any gains or losses are shared.

3. Murabaha - It is a cost plus contract sold by an institution to the buyer. Profit is known to both the parties in advance.

4. Salam - It is a type of forward contract whereby goods are agreed to to delivered in future but the payment is made in advance.

5. Istisna - It allows a financial institution to purchase an ongoing construction project. It will be delivered in future.

6. Wadia - In this contract, property is transferred by one person to another for safe-keeping.

7. Hiwala - It is similar to factoring arrangement whereby a debtor is transferred to another person.

8. Kafala - It is similar to guarantee contract whereby one party undertakes to pay the obligation of another party in case the first party defaults.

9. Musharaka al-Mutanaqisa (Diminishing Musharka) - This type of financing is popular in case of housing. Firstly, the property is jointluy owned.

10. Ijarah - It is a contract made for hiring of persons or their services.

11. Qardh-ul Hasan - It is a type of interest free loan which is extended to people who are in need.

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ekkarill92 answered 2 years ago

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