Murabaha

An Islamic financing structure, where an intermediary buys a property with free and clear title to it. The intermediary and prospective buyer then agree upon a sale price (including an agreed upon profit for the intermediary) that can be made through a series of installments, or as a lump sum payment.

Murabaha is not an interest-bearing loan, which is considered riba (or excess). Murabaha is an acceptable form of credit sale under Sharia (Islamic religious law). Similar in structure to a rent to own arrangement, the intermediary retains ownership of the property until the loan is paid in full.

It is important to note that to prevent riba, the intermediary cannot be compensated in addition to the agreed upon terms of the contract. For this reason, if the buyer is late on their payments, the intermediary cannot charge any late penalties.


Investment dictionary. . 2012.

Look at other dictionaries:

  • Murabaha — (arabisch ‏مرابحة‎, DMG murābaḥa) ist ein im Islamischen Finanzwesen gebräuchliches Finanzierungsinstrument, das konform ist mit der Scharia. Hierbei agiert die Bank als Zwischenhändler zwischen Käufer und Verkäufer. Die Bank kauft im… …   Deutsch Wikipedia

  • murabaha — (cost plus financing) murabaha arrangements are commodity trading arrangements for financial institutions. The financial institution buys an asset from a supplier and then sells it to a customer at an agreed price that is higher than the purchase …   Law dictionary

  • Murabaha — Part of a series on Islamic jurisprudence (Fiqh) …   Wikipedia

  • Murabaha — Cost plus profit financing. The Murabaha technique is used extensively to facilitate the trade finance activities of Islamic financial institutions. The financial institution purchases and takes title to the necessary equipment or goods from a… …   Financial and business terms

  • murabaha — is., esk., Ar. murābaḥa 1) Bir malı çok fazla kârla satma 2) Tefecilik …   Çağatay Osmanlı Sözlük

  • MÜRABAHA — (Bak: Murabaha …   Yeni Lügat Türkçe Sözlük

  • murabaha — See: Islamic finance …   Accounting dictionary

  • murabaha — See Islamic finance …   Big dictionary of business and management

  • MURABAHA — Bir malı kâr ile satmak. * Bir miktar ilâve ederek ödünç para alıp vermek. * Fâiz ile para alıp vermek …   Yeni Lügat Türkçe Sözlük

  • murabaha — kanunun belirlediğinden fazla faiz alınması; tefecilik …   Hukuk Sözlüğü

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