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NCCPL launches Murabahah Share Financing (MSF) System

A Shariah compliant mode of finance in eligible securities of PSX - NCCPL is proud to launch Murabaha Share Financing (MSF) System effective from Sept 02, 2019.

Murabahah Share Financing – An Introduction

Murabaha is primarily a sale transaction which is used to finance the purchase requirements of the customer in a Shariah compliant manner. This basically involves the purchase of the required security by the financier. After the financier has completed the purchase of the security, it is sold to the customer at cost plus a disclosed amount of profit, with payment due at an agreed future date.

 

Murabahah Share Financing – Need and Purpose

  • Shariah Complaint Financing has emerged as a viable alternate to conventional interest-based financing.
  • In the absence of any Shariah compliant financing, investors are deprived to purchase shares on credit in a Shariah compliant manner.
  • The growing interest and need of the investors has mandated to develop and introduce equity based Murabaha Financing Model for the capital market investors.
  • The interest free financing concept backed by Shariah approvals has tremendous potential to attract investors.
  • Murabaha Share Financing can be an attractive financing avenue for the Islamic banks operating in Pakistan due to limited availability of Shariah compliant investment options in capital market and excess liquidity available with such banks. 
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