SHORT TERM FINANCING PRODUCTS

MCB Islamic Bank has a complete product suit for extending Shari’ah Compliant products for short-term and working Capital Finance including Murabaha, Istisna, Finished Goods Murabaha, Musawamah and Musharakah Running Finance for catering to balance sheet needs of Corporates / MNCs and managing their day-to-day funding needs:

Murabaha Financing

MCB Islamic offers ease on working capital finance for managing raw material/inventory requirement through Murabaha.

The product is a type of sale transaction in which the seller discloses the cost of goods and profit to the buyer. The bank purchases the assets from the market and subsequently sells them to the customer on spot / deferred basis in which the Bank will disclose the cost and the profit to determine the Murabaha selling price to the customer.

Murabaha is offered for Long, Medium & Short term Financing Facility. MCB Islamic offers these variants in this Mode of Financing:

  • Murabaha Local Purchase / Import
  • Finished Goods Murabaha (Local/ Export)
  • Advance Against Future Murabaha (AAFM) Local/Import
Musawamah Financing

Musawamah is a type of product in which the seller is not obligated to disclose to a buyer the price paid by the seller to create or obtain the goods / commodities. MCB Islamic bank purchases the assets and subsequently sells them to the customer on spot / deferred basis in which the MCB Islamic Bank is not required to disclose the cost and the profit to the customer and only Musawamah price (selling price) is disclosed.

Musawamah is offered for Long, Medium & Short term Financing Facility. MCB Islamic offers these variants in this Mode of Financing:

  • Musawamah – Local Purchase / Import
  • Musawamah – Advance Against Future Musawamah (AAFM) Local / Import
  • Finished Goods Financing (Under Musawamah Mode) Local /Export
Istisna Financing

MCB Islamic provides solution for Short term financing under Istisna is an order to manufacture which is a contract of sale by specification of items to be manufactured / constructed and not identified at the time of sale, where the buyer places an order with the seller to manufacture certain asset and the sale is completed upon delivery of the asset to the buyer.

Istisna Financing can be an effective solution for meeting the working capital and trade finance requirements etc. of the customers. Istisna Financing can be easily utilized to facilitate payment of wages, overheads etc. in addition to raw material purchases. Hence, it provides more flexibility and a wide range of applications for the benefit of the customers. The working capital needs of the customer can be fulfilled through Istisna Financing.

MCB Islamic Bank orders the manufacturer to manufacture the specified goods and makes payment. The goods are delivered to the Bank within the agreed upon delivery time / during the tenor of the transaction. After taking the delivery, these goods are sold to ultimate buyers (other than the manufacturer), either directly by the Bank or by appointing the customer as the Bank’s selling agent.

Commodity Salam Financing

A Salam transaction is the purchase of a commodity (homogenous) for deferred delivery in exchange for immediate (in advance) full payment.

Salam or Salaf is a fiqh terminology which refers to a sale contract in which specified subject matter (natural product such as various crops) will be delivered at an agreed future date in exchange of price which is fully paid in advance.

MCB Islamic provides solution for Short term financing under this financing facility to meet the working capital requirements of the customers which is based on the concept of sale of homogenous goods / commodities by the customer with deferred delivery of goods to the Bank against immediate full payment in advance.

MCB Islamic will then appoint Customer as an Agent to sell the goods/ commodities in the market on behalf of the Bank. The Bank will adjust the financing from the sale proceeds of the goods / commodities.

Currency Salam

Currency Salam can be used for providing financing facility to Customers who are involved in export oriented business. It is an alternative to Conventional Bill Discounting product which based on interest.

Salam or Salaf is a fiqh terminology which refers to a sale contract in which specified subject matter will be delivered at an agreed future date in exchange of price which is fully paid in advance.

MCB Islamic Bank purchases foreign currency from Customer (Exporter) to be delivered on a specified future date against immediate payment in local currency (PKR).

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