About Us
Islamic finance offers several key advantages, which make it an essential component of a responsible and inclusive financial system. It promotes economic stability, risk sharing, social justice, and ethical behavior. By emphasizing real economic activities and discouraging speculation, Islamic finance fosters sustainable growth and ensures a fair distribution of wealth.
What ARBA is involved in
Islamic finance
Mudaraba
Mudaraba is a partnership where one party provides capital (rab-ul-maal), while the other contributes expertise and labor (mudarib). Profits are shared based on an agreed ratio, and losses are borne by the capital provider.
Murabaha
Murabaha is a common Islamic financing method where a financial institution purchases an asset for the customer and sells it to them at a higher price. The customer repays the cost plus an agreed profit margin in installments over a specified period.
Musharaka
Musharaka refers to a partnership arrangement where two or more parties contribute capital to finance a project. Each partner shares in the profits and losses based on their capital contribution. It emphasizes risk-sharing and can be used for various types of financing, including project financing and equity investments.
Sukuk
Sukuk refers to Islamic bonds that represent proportionate ownership in an underlying asset or project. Unlike traditional bonds, Sukuk holders receive a share of the profits generated by the asset or project instead of interest. Sukuk can be structured in different ways, including leasing (ijara), partnership (musharaka), or asset-based (murabaha).
Ijara
Ijara is a leasing arrangement in which the financial institution purchases an asset and leases it to the customer for a specific period. The customer pays regular lease payments, which may include a portion for eventual ownership (known as ijara wa iqtina). At the end of the lease period, the customer may have the option to purchase the asset.
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