SME Products

  • Short Term (Working Capital Requirement)

    Murabaha means a sale of goods by a person to another under an arrangement whereby the seller is obliged to disclose to the buyer the cost of goods sold either on cash basis or deferred payment basis and a margin of profit included in the sale price of goods agreed to be sold.

    Description Specific Product Details
    Name of Product: Murabaha
    Basis of Pricing: A fixed profit rate OR a floating profit rate linked with a benchmark, e.g. KIBOR, is offered keeping in view the prevailing market practices/dynamics
    Financing Limits:
    • Minimum: Per party limit as per SBP Prudential Regulations/as per facility approval
    • Maximum: Per party limit as per SBP Prudential Regulations/as per facility approval
    Tenors:
    • For Working Capital:  Upto 1 year
    • For Fixed Assets Financing: Upto 3 years
    Target Customers: Corporate/Commercial/SME
    Security/Collateral: On a case to case basis, e.g. hypothecation, charge on assets, mortgage of properties, pledge, lien on deposits, etc. as per facility approval

     

    Repayment
    Murabaha Cost Component
    (i.e. Principal):
    • 1 to 3 months – bullet at maturity
    • 6 months to 3 years – quarterly/or as per facility approval
    Payment of Murabaha Profit Component:
    • 1 to 3 months – bullet at maturity
    • 6 months to 3 years – Quarterly/or as per facility approval

    Istisna is a mode of sale, at an agreed price, whereby the buyer places an order to manufacture, assemble or construct, or cause so to do anything to be delivered at a future date. The commodity must be known and specified to the extent of removing any ambiguity regarding its specifications including kind, type, quality and quantity etc.

    Description Specific Product Details
    Name of Product: Istisna
    Underlying Mode: Istisna
    Type of Product: Corporate /Commercial / SME
    Basis of Pricing/ Return: Floating profit rate linked with KIBOR, will be offered keeping in view the prevailing market practices/dynamics.
    Financing Limits: Min / Max: Per party limit as per SBP Prudential Regulations / as per Facility approval
    Tenors: To meet working capital requirements Upto 01 Year
    For fixed assets Up to 03 Years
    Target Customers: Corporate /Commercial / SME
    Security/ Collateral On a case to case basis e.g. Hypothecation, Charge on Assets, Mortgage of property, Pledge, lien on deposits etc. as per Facility Approval.

    Salam (advance payment against deferred delivery of goods) means a kind of sale whereby the seller undertakes to supply specific goods (Al-Muslam Fihi) to a buyer at a future date in consideration of a price fully paid in advance at the time the contract of sale is made. Salam can be effected in respect of ‘Dhawatul-Amthal’ which represent such commodities, the units of which are homogenous in characteristics and are traded by counting, measuring or weighing according to usage and customs of trade.

    Description Specific Product Details
    Name of Product: Salam
    Basis of Pricing/Return: Profit on sale of Salam goods, after its delivery, to be charged, keeping in view the prevailing market practices/dynamics
    Financing Limits:
    • Minimum: Per party limit as per SBP Prudential Regulations/as per facility approval
    • Maximum: Per party limit as per SBP Prudential Regulations/as per facility approval
    Tenors: Upto 1 year
    Target Customers:  Corporate/Commercial/SME
    Security/ Collateral: On a case to case basis, e.g. hypothecation, charge on assets, mortgage of properties, pledge, lien on deposits, etc. as per facility approval
    Repayment: On due date, the client will make the delivery of Salam goods (Muslam Fihi) to the Bank. The Bank will sell the Salam goods (Muslam Fihi) either directly or through its agent, to recover the amount advanced along with profit

  • Long Term

    Diminishing Musharakah is a form of co-ownership in which two or more persons share the ownership of a tangible asset in an agreed proportion and one of the co-owners undertakes to buy in periodic installments the proportionate share of the other co-owner until the title to such tangible asset is completely transferred to the purchasing co-owner. Diminishing Musharakah can be created only in tangible assets. Diminishing Musharakah shall be limited to the specified asset(s) and not to the whole enterprise or business.

    Description Specific Product Details
    Name of Product: Diminishing Musharakah (for commercial property/plant & machinery, equipment, etc)
    Basis of Pricing/Return: The rental amount is calculated with reference to a well known benchmark as per prevailing market practices/dynamics, e.g. KIBOR
    Financing Limits:
    • Minimum: Per party limit as per SBP Prudential Regulations/as per facility approval
    • Maximum: Per party limit as per SBP Prudential Regulations/as per facility approval
    Tenors: Upto 20 years
    Target Customers: Corporate/Commercial/SME
    Security/Collateral: On a case to case basis, e.g. hypothecation, charge on assets, mortgage of properties, pledge, lien on deposits, etc. as per facility approval
    Repayment:
    • Unit purchase (i.e. principal): Monthly/or as per facility approval
    • Rental payment (i.e. profit): Monthly/or as per facility approval

    Ijarah is a contract whereby the owner of an asset, other than consumables, transfers its usufruct to another person, for an agreed period, for an agreed consideration. In Ijarah, the corpus of the leased asset remains in the ownership of the lessor and only its usufruct is transferred to the lessee.

    Description Specific Product Details
    Name of Product: Ijarah for plant & machinery/equipment/commercial vehicles
    Basis of Pricing/Return: Ijarah Rentals are determined by using any well known/ recognized bench mark as per prevailing market practices/dynamics e.g. KIBOR OR it can also be Fixed
    Financing Limits: Minimum: Per party limit as per SBP Prudential Regulations/as per facility approval
    Maximum: Per party limit as per SBP Prudential Regulations/as per facility approval
    Tenors: Minimum: 1 year
    Maximum: 7 years
    Target Customers: Corporate/Commercial/SME
    Security/Collateral: On a case to case basis e.g. exclusive ownership of Ijarah asset by the Bank, security deposit, hypothecation, charge on assets, mortgage of properties, pledge, etc. as per facility approval
    Repayment: Monthly Ijarah rental payments or as per facility approval
  • Trade / LG

    AKBL-IBSD may open Letter of Credits (LC) in following ways:

    • Sight LCs under Master Murabaha Facility Agreement (MMFA)/Agency Agreement
    • Usance LCs without MMFA/Agency Agreement
    • Usance LCs Under MMFA/Agency Agreement
    AKBL-IBSD may open Letter of Credits (LC) in following ways:

    • Bid Bond
    • Performance Bond
    • Advance Payment Guarantee
    • Retention Money Guarantee
    • Maintenance Guarantee
    • Payment Guarantee
    • Financial Guarantee
    • Shipping Guarantee

    The Islamic Export Refinance Scheme shall be utilized by the Islamic Banking Branches (IBBs) to provide financing facility to the Exporters (Direct or Indirect) for eligible commodities.