Trade Finance Solutions

We offer Sharia-compliant trade finance services, including Islamic letters of credit, guarantees, and working capital solutions to facilitate the smooth and ethical flow of goods and services across borders. Our trade finance solutions enable businesses to grow and expand internationally while adhering to Islamic financial standards.

Our solutions cater to both importers and exporters, ensuring that trade activities are efficient, risk-managed, and fully aligned with Islamic finance principles.

1. Murabaha (Cost-Plus Financing)

Murabaha is one of the most widely used trade finance instruments in Islamic finance. It enables businesses to finance the purchase of goods without engaging in interest-based loans.

How it Works:

We purchase the required goods on behalf of the client and resell them at a pre-agreed profit margin. The client pays for the goods over an agreed period, ensuring that the transaction remains Sharia-compliant.

Key Benefits:

• Provides transparent cost-plus pricing.
• Enables businesses to obtain necessary goods without interest (riba).
• Facilitates smoother trade cycles for both importers and exporters.

2. Istisna (Manufacturing and Project Financing)

Istisna is ideal for businesses involved in large-scale manufacturing or project financing, where goods or services are delivered at a future date.

How it Works:

The bank finances the production or construction of goods or projects on behalf of the client, agreeing on price and delivery terms upfront. Upon completion, the client takes delivery and pays according to the pre-arranged schedule.

Key Benefits:

• Supports long-term trade and manufacturing projects.
• Allows businesses to finance construction or production while maintaining liquidity.
• Flexibility in pricing and payment terms.

3. Wakalah (Agency-Based Financing)

Wakalah is an agency arrangement where the bank acts on behalf of the client to manage trade transactions and ensure they adhere to Islamic finance principles.

How it Works:

The client appoints the bank as their agent to conduct trade transactions, such as negotiating terms, purchasing goods, or arranging shipment. The bank charges a fee for this service and ensures that all transactions are Sharia-compliant.

Key Benefits:

• Delegates the complexities of trade management to an experienced partner.
• Streamlines trade processes while adhering to Islamic principles.
• Suitable for businesses looking to outsource trade logistics and financial management.

4. Islamic Letters of Credit (LC)

An Islamic Letter of Credit (LC) ensures that both importers and exporters can engage in international trade with the assurance that payments will be made according to agreed terms.

How it Works:

The bank guarantees payment on behalf of the buyer (importer) to the seller (exporter), contingent upon the seller meeting all contractual obligations and delivering the goods. The LC can be structured to comply with Sharia principles, avoiding interest-based clauses.

Key Benefits:

• Reduces risk for both importers and exporters.
• Provides security and trust in international transactions.
• Enhances trade relationships by facilitating smoother cross-border deals.

5. Islamic Guarantees and Performance Bonds

We offer Sharia-compliant guarantees and performance bonds to ensure that businesses meet their contractual obligations in trade and project finance transactions.

How it Works:

The bank provides a guarantee or bond on behalf of the client, ensuring that they will fulfill their contractual commitments (such as delivering goods or completing a project). If the client fails to meet these obligations, the bank compensates the counterparty.

Key Benefits:

• Protects against non-performance and trade default risks.
• Strengthens business relationships by providing assurance to trading partners.
• Facilitates larger contracts and project deals with international partners.

6. Islamic Trade Working Capital Solutions

We offer working capital solutions that are Sharia-compliant to support the day-to-day liquidity needs of businesses engaged in trade.

How it Works:

We provide short-term financing to cover operational costs, such as purchasing raw materials or covering production expenses. Our working capital solutions ensure liquidity while remaining interest-free and asset-backed, complying with Sharia principles.

Key Benefits:

• Ensures businesses maintain liquidity for day-to-day operations.
• Supports growth by providing necessary capital for trade activities.
• Structured to be fully compliant with Islamic law.

7. Takaful (Islamic Insurance)

To safeguard trade transactions, we offer Takaful, an Islamic insurance product that protects businesses against trade-related risks, such as non-payment, damage, or loss of goods.

How it Works:

Takaful is a cooperative insurance scheme where participants contribute to a pool of funds, which is used to indemnify members against trade-related risks. The structure ensures that the process is ethical, transparent, and compliant with Islamic law.

Key Benefits:

• Provides security for trade participants.
• Mitigates risk exposure for businesses involved in high-value trade.
• Fully compliant with Sharia principles, promoting mutual cooperation.