SEAF-AGF Introduces Sharia Compliant Investments

Date: Jan 01, 2010

AGF has made two Murabahah loans and plans to expand its Sharia compliant products to include the following:

Traditional Product Category	Islamic Financing Version
Short Term Credit	Murabaha: A sales contract between a financer and its customers, mostly for trade financing. The financier purchases goods ordered by the customer, the customer pays the original price plus a profit margin agreed upon by the two parties. Repayment by installment within specified period. Istithna: A sales contract between financier and customer where the customer species goods to be made or shipped, which the bank then sells to the customer according to a pre-agreed arrangement. Prices and installment schedules are mutually agreed upon in advance.
Term Credit and Leases	Ajaar, Lease and Hire Purchase: A contract under the financier leases equipment to a customer for a rental fee; at the end of the lease period the customer will buy the equipment at an agreed price minus the rental fees already paid. Mu’ajjal, Purchase with deferred delivery: A sales contract where the price is paid in advance by the financier and the good are delivered later by the customer to designee.
Structured Term Capital	Mudarabah: A profit-sharing partnership to which one contributes the capital and the other the entrepreneurship; or the profit financier provide the capital, the customer manages the project. Profit is shared according to a pre-agreed ration.