Musharaka

Sharing of Commodities and Promise to Purchase

The Bank may, with one partner or more, participate in the purchase of a specified commodity with a capital defined before signing the participation contract. The partner/ partners shall sign a separate contract promising to buy the Banks' share in Murabaha formula.

Areas of Application This Product:
This product can be applied on commodities, goods, vehicles, machinery, equipment and factories. It also applies for personal purposes, commercial and productive. This is done via the participation of the Bank with its clients from all segments, either individuals, companies, establishments or the other public parties who own only a part of the liquidity needed for the asset. The Bank thus enter as a partner in the transaction which ultimately ends by selling its share in the asset via Murabaha formula to the partner/ partners after the two parties own together the asset concerned.

Executive Procedures and Practical Steps for Implementing the Product:
First: for individuals on payrolls in the public sector:
  • First Stage:
    1. The client must be a holder of a current account at the branch.
    2. The client shall sign the Share and Promise to Purchase application to buy the Bank's share in the asset.
    3. Salary certificate accompanied by an underwriting from the employer pledging not to transfer the salary or close the account only after the written consent of the Bank.
    4. The client must introduce a guarantor from the public sector whose salary is regularly transferred to the Bank.
  • Second Stage:
    1. Signing the participation contract by the two parties (the Bank and the partner).
    2. Depositing the capital of the participation transaction (the shares of the partners) in the account allocated for the transaction in accordance to the pre- agreed ratios.
  • Third Stage:
    1. Buying the commodity and owning it by the two parties.
  • Fourth Stage:
    1. Submitting the application by the partner to buy the Bank's share.
    2. Signing the sale contract of the Bank's share to the partner according to Murabaha formula.
    3. Signing the pre- agreed guarantees for the favor of the Bank.
    4. The signature of the client on the document affirming he received the commodity in partnership.
    5. Settling the accounts of the participation and proof of profit or losses bottom line.

Second: for the self – employed and workers in the private sector:
  • First Stage:
    1. The client must be a holder of a current account at the branch.
    2. A salary certificate endorsed by the tax agency.
    3. The client must introduce two guarantors from the public sector whose salaries are regularly transferred to the Bank.
    4. The client must sign the participation and the promise to purchase the Bank's share application.
  • Second Stage:
    1. Signing the participation contract by the two parties (the Bank and the partner).
    2. Depositing the capital of the participation transaction (the shares of the partners) in the account allocated for the transaction in accordance to the pre- agreed ratios.
  • Third Stage:
    1. Buying the commodity and owning it by the two parties.
  • Fourth Stage:
    1. Submitting the application by the partner to buy the Bank's share.
    2. Signing the sale contract of the Bank's share to the partner according to Murabaha formula.
    3. Signing the pre- agreed guarantees for the favor of the Bank.
    4. The signature of the client on the document affirming he received the commodity in partnership.
    5. Settling the accounts of the participation and proof of profit or losses bottom line.
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