Islamic Funding Structures And Financing Alternative | SHARIA | Muslim Compliant Businesses Best Practice

The financial jurisprudence adhered to by this site is after the manner of Mufti Taqi Usmani
Mufti Muhammad Taqi Usmani, Sheik-Ul-Islam, is one of the leading Islamic scholars living today. He graduated par excellence form Dars e Nizami at Darul Uloom, Karachi, Pakistan. He served as a judge on the Federal Shariat Court of Pakistan from 1981 to 1982 and theShariat Appellate Bench of the Supreme Court of Pakistan between 1982 and 2002. He is an expert in the fields of Islamic Jurisprudence (fiqh), economics, and hadith. Then he specialized in Islamic Jurisprudence under the guidance of his eminent father, Mufti Muhammad Shafi, the late Grand Mufti of Pakistan. Since then, he has been teaching hadith and Fiqh at the Darul-Uloom, Karachi.

MUSLIM FINANCIAL BEST PRACTICES

Sharia Compliance - The Duty After The Duty

Islamic banks around the world have devised many creative financial products based on the risk-sharing, profit-sharing principles of Islamic banking. For day to day banking activities, a number of financial instruments have been developed that satisfy the Islamic doctrine and provide acceptable financial returns for investors. Broadly speaking, the areas in which Islamic banks are most active are in trade and commodity finance property and leasing. Some of the basic financial techniques of Islamic banking are the following

The concepts of equity and morality are at the root of Islamic banking and absence from interest. In Islam moral and equitable values form an integral part of the rules of law governing contractual and financial relations to such an extent that the relationship which exists between equity, law and religion is an organic rather than supplementary relationship. The importance of Islamic banking has increased dramatically over the past 10 years. The main difference between Western and Islamic-style banking is the concentration on people and their businesses rather than on accounts- it is a much more 'grass roots' banking according to one expert.

MUDARABAH

Definition

This implies a contract between two parties whereby one party, the rabb al-mal (beneficial owner or the sleeping partner), entrusts money to the other party called the mudarib (managing trustee or the labour partner). The mudarib is to utilise it in an agreed manner and then returns to the rabb al-mal the principal and the pre-agreed share of the profit. He keeps for himself what remains of such profits

MUDARABAH

Application

Mudaraba: This implies a contract between two parties whereby one party, the rabb al-mal (beneficial owner or the sleeping partner), entrusts money to the other party called the mudarib (managing trustee or the labour partner). The mudarib is to utilise it in an agreed manner and then returns to the rabb al-mal the principal and the pre-agreed share of the profit. He keeps for himself what remains of such profits. The following characteristics of mudaraba are of significance:

Briefly, an Islamic bank lends money to a client - to finance a factory, for example - in return for which the bank will get a specified percentage of the factory's net profits every year for a designated period. This share of the profits provides for repayment of the principal and a profit for the bank to pass on to its depositors. Should the factory lose money, the bank, its depositors and the borrower all jointly absorb the losses, thereby putting into practice the pivotal Islamic principle that the providers and users of capital should share risks and rewards.

Mudaraba is considered to be the essential mode accredited by the Islamic banks in their relationship with the depositors who tender their moneys to the bank as capital owners to be invested by the bank as Mudarib on the basis of profit sharing according to specific ratios agreed upon.

The Islamic banks use the same mode with the investors who are capable to work whether they are physicians or engineers or they are traders or craftsmen. The bank provides the adequate finance as a capital owner in exchange of a share in the profit to be agreed upon.

It is worth noting that this mode is a high risk for the bank because the bank delivers capital to the Mudarib who undertakes the work and management and the Mudarib shall only be a guarantor in case of negligence and trespass. The Islamic banks usually take the necessary precautions to decrease the risk and to guarantee a better execution for the Mudaraba and pursues this objective with seriousness.

MUDARABAH

Rules

The division of profits between the two parties must necessarily be on a proportional basis and cannot be a lump-sum or guaranteed return.

It is a condition in Mudaraba that capital must be specific for its return to owner is mandatory at the settlement of the Mudaraba, so its amount must be known at the contract, and because the uncertainty about the amount of capital necessarily leads to uncertainty about the amount of profit, which represents an increment in capital.

It is a condition that capital must be a currency in circulation, however, it can be merchandise only in condition that it is evaluated at the contract and the agreed upon value becomes the capital of Mudaraba.

It is a condition that its capital must not be a liability debt on the Mudarib, because the Mudarib is a trustee and in respect to the debt, it is a guarantor who can only be absolved after payment.

It is permissible for a Mudarib to mix its private capital with the capital of the Mudaraba. Thus it becomes a partner, as well, and its disposal of capital on the basis of Mudaraba is permissible.

It is a condition that the capital of Mudaraba must be delivered to the Mudarib because not delivering it imposes constrictions on the Mudarib and restricts its power disposal. Some of the jurists permit the capital owner to withhold capital and to release it gradually according to the needs of the Mudarib since Mudaraba adjudges unrestricted disposal but not delivery.

It is permissible for the capital owner to delivery its capital to two in a single contract because its contract with them is a contract with each. It is permissible for the capital owner to variate between them in profit shares because of their difference in diligence and dexterity.

It is permissible to impose restrictions on the Mudarib if the restriction is beneficial and does not constitute a constriction on the agent to attain the profit required and is not counterproductive to the purpose of the Mudaraba. If the Mudarib violates the restriction or contravenes the beneficial condition it becomes a usurper and guarantees capital to the capital owner.

It is permissible for the Mudarib to hire an assistant in difficult work which it is to do by itself. Recourse shall be made to prevailing custom to determine that.

The disposal of the Mudarib is confined to what is conducive to the Mudaraba. It must lend or donate nothing of the Mudaraba capital. It is also not allowed to purchase, for Mudaraba, with more than its capital, nor is it allowed to go into partnership with others using the Mudaraba capital. All of the above is permissible if the capital owner consents and authorizes the agent to use its descretion.

No security on the Mudarib shall be stated in the Mudaraba contract except in case of negligence or trespass, because the Mudarib is a trustee on what is in its hold, capital is judged as a deposit. It is permissible to take a surety or mortgage from the Mudarib to guarantee the payment in case of negligence or trespass or violation of conditions, but it is impermissible to take that as a guarantee to capital or profit, because it is impermissible for the Mudarib to guarantee capital nor profit.

It is a condition that profit should be specific because it is the subject of the contract and being unknown abrogates the contract. The contracting parties should stipulate in the contract the profit shares (in percent for each one. It is impermissible to stipulate a lumpsum as profit to either party so as not to lead to the termination of profit by one of them.

Profit in Mudaraba is distributed according to the agreement of the two contracting parties. They may agree on specific ratios, be it more, be it less. It is a condition that the capital owner bears alone the loss (the Mudarib bears nothing of it) because loss is a decrease in capital and capital belongs to the owner.

The Mudarib shall collect its share of the profit only after obtaining the permission of the capital owner. Also the Mudarib is entitled to collect its share of profit only after capital is recovered, because the principle says "profit is protection to capital". In case of temporary division of profit before the final settlement, and the Mudaraba is continuing, the loss incurred later shall be made good from the profit distributed.

The ownership of the Mudarib becomes secure after the liquidation of the Mudaraba and the capital owner recovered its capital. Some of the jurists hold the view that auditing is like division and possession. If two parties reach a final settlement after the liquidation of the assets and leave the Mudaraba, it is considered to be a new Mudaraba and neither one makes good the loss of the other.

Mudaraba is terminated if one of the two parties rescinds it, because it is an optional not a binding contract. Some of the jurists hold the view that Mudaraba is binding and it cannot be rescinded if the Mudarib commences work.

MUDARABAH

Evidence

Others traveling through the land Seeking of Allah's bounty; Al-Muzzammil 20

It is no crime in you If ye seek of the bounty of your Lord. Al-Baqara 198

It was proved in the "Sira" biography of the Prophet (PBUH), that before prophethood, he traveled to Syria as a Mudarib with the capital of Khadeeja (may Allah be pleased of her) and the Messenger of Allah related that after the Message approving it.

The companions (may Allah be pleased with them) transacted in Mudaraba and none of them was reported to have adverse opinion. There is also a consensus among the Ummah for generations on the permissibility of Mudaraba.

MUDARABAH

Methods

The following is an illustration of the steps of the Mudaraba contract.

1. Establishing a Mudaraba project:

The Bank: provides the capital as a capital owner.

The Mudarib: provides the effort and expertise for the investment of capital in exchange for a share in profit agreed upon.

2. The results of Mudaraba:

The two parties calculate the earnings and divide the profits at the end of Mudaraba, this can be done periodically in accordance with the agreement along with observance to legal rules.

3. The participation in capital:

The bank recovers the Mudaraba capital it contributed before dividing the profits between the two parties because profit is protection of capital. In case of agreement to distribute profits periodically before the final settlement it must be on account until the security of capital is assured.

In case of loss, the capital owner (the bank) bears the loss.

In the event of profits, they are divided between the parties in accordance with the agreement between them with observance to the principle "profit is protection to capital".

MUDARABAH

Products

Briefly, an Islamic bank lends money to a client - to finance a factory, for example - in return for which the bank will get a specified percentage of the factory's net profits every year for a designated period. This share of the profits provides for repayment of the principal and a profit for the bank to pass on to its depositors. Should the factory lose money, the bank, its depositors and the borrower all jointly absorb the losses, thereby putting into practice the pivotal Islamic principle that the providers and users of capital should share risks and rewards.

MUDARABAH

Feature

The mudarib is to utilise it in an agreed manner and then returns to the rabb al-mal the principal and the pre-agreed share of the profit. He keeps for himself what remains of such profits. The following characteristics of mudaraba are of significance:The division of profits between the two parties must necessarily be on a proportional basis and cannot be a lump-sum or guaranteed return.The investor is not liable for losses beyond the capital he has contributed. The mudarib does not share in the losses except for the loss of his time and efforts

The investor is not liable for losses beyond the capital he has contributed.

The mudarib does not share in the losses except for the loss of his time and efforts

Briefly, an Islamic bank lends money to a client - to finance a factory, for example - in return for which the bank will get a specified percentage of the factory's net profits every year for a designated period. This share of the profits provides for repayment of the principal and a profit for the bank to pass on to its depositors. Should the factory lose money, the bank, its depositors and the borrower all jointly absorb the losses, thereby putting into practice the pivotal Islamic principle that the providers and users of capital should share risks and rewards.

Mudaraba in essence is based on the concurrence of those who have capital with those who expertise, where the first party provides capital and the other party provides the expertise with the purpose of earning Halal profit (lawful) which will be divided between them in ratios agreed upon

This mode achieves the interest of both parties, the capital owner and the Mudarib (agent). The capital owner may not have the time or the experience to turn over capital and trade with. The agent (the Mudarib) may not have the adequate capital to put to use his experience.

COMMENT

DEEN OF SUBMISSION

The challenge of Islam is for societies to create institutions, infrastructure and systems that will preserve the values of Islam together with the individual freedom of all of creation. The Share'eah contains prescriptions, recommendations, suggestions, general principles, and guidelines that may be considered the basis for an overall economic and commercial theory. Such a theory must be part of the complete vision of Islam and the integration of all aspects of human life. Critics unaware of Islam's Share'eah Laws, and much of the response that surrounds any discussion of it is based on this unawareness.

Islam is a way of life, a form of government, a social structure, as well as a regulatory norm for interpersonal relationships. The conduct of business is not different, and apart from all these other aspects of social life. It is a part of human life and normal like any other.

WAKAALAH

Definition

Literally Wakalah means protection or remedying on behalf of others. Legally Wakalah refers to a contract where a person authorizes another to do a certain well-defined legal action on his behalf. It is a contract of agency which means doing any work or providing any service on behalf of any other.
The majority of the jurists consider WAKALA'a as one of the divisions of Salam, therefore it is subsumed under the definition of Salam. But the Hanafite school of jurisprudence makes WAKALA'a an independent and distinct contract. The jurists of the Hanafite school have given various definitions to WAKALA'a, some of which are: "That it is a contract with a manufacturer to make something" and "It is a contract on a commodity on liability with the proviso of work".

KAFAALAH

Definition

Kafaalah is an Arabic word from the scale of Nasara, Yansuru. It means to join. Allah Ta'ala has 99 qualities. One is al-Kafeel as he joins (assists) in the affairs of every creation.

1) Sharee Definition

'To attach a responsibility to another in a claim.' (Hidaaya). Kafaalat is permissible. This is proven from two prime sources of Shari'ah.

SUKUK

Definition

So Called Islamic Bonds

Modern "SUKUK" emerged to fill a gap in the global capital market. Islamic investors want to balance their equity portfolios with bond-like products. Because "SUKUK" are asset-based securities — not debt instruments — they fit the bill. In other words, "SUKUK" represent ownership in a tangible asset, usufruct of an asset, service, project, business, or joint venture

Each "SUKUK" has a face value (based on the value of the underlying asset), and the investor may pay that amount or (as with a conventional bond) buy it at a premium or discount.

EditorsNote

Please note that our representation here is neither to seen or accepted as guidance, acceptance, or recommendation. Rather it is EXISTENCE.

We share this information here, with the intention that the community is informed of the existence of this product, which some muslims (and others do not) accept as compliant. For our part, we do not participate in this product.

We know business needs!

We (a) Seek to establish approved income activities and an enhanced ROI for our prospects while applying the principles of Islam; (b) invite all to right conduct, and to proceed on common terms; (c) to be available to our community for compliance in their operations; (d) Be exemplars of what we call others to.

You may use our services for brainstorming, planning and/or implementation, to resolve issues and challenges.

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Understand technology

We provide custom configurations to ensure relevance to internal/external culture, procedures, needs etc.

We convene and discuss the range of possibilities suitable to satisfy the need requirement.

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Do the duty after the duty

."If one of ten Dirhams used to select a cloth is tainted the Salah is unacceptable as long as the cloth is worn."(Musnad Ahmad).. .

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Gap Mgnt Intervention

Critical Culture Shifting and Profit Enhancement Change has occurred (perhaps someone has just left suddenly) or it is about to (A strategic change is to be implemented) Extremely cost efficient:

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Just-in-Time Support

Non-executive directors are usually found in big, multi-national companies.

In reality there is often a genuine requirement for a good Director in smaller and owner-managed companies.

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Profit Oriented Trade-Offs

Our PM practice method lets you know if you are doing the first things first. How to know what to do before the first thing.

How do know what is involved and what will pull it together.

We can help you with your decision-making strategies, tradeoffs, and shortcuts in high ambiguity settings, and ease some of your anxieties over uncertainties.

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Prod/Svc Evaluation

Many Business Plans are rejected simply for being too complicated, too simplistic, or because the wording of the plan and the actual financial forecasts that accompany it do not agree with each other.

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Owner/Mgr Evaluation

Stress Test owner, management and team. owner .

How well are you equipped to manage your dream operations in meeting the deliverables of customers that have entrusted their business to you.

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Biz/Project Evaluation

Stress Proof Business. If your business/project received a report card, what do you think it would say.

At critical periods, companies are required as a better practice principle to conduct internal business and personal process evaluation operations commonly called STRESS TESTS

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Foreign (local) Office

Different cultures and values add to the hurdles to be overcome before the first staff is employed, or the first product/service is rolled out.

Dispatching your own staff to the new country immediately, may require costly and time-consuming training and orientation and dislocation.

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PlcCounsel ToGo

Need An Expert Stand-In or have a meeting that you dread attending, or will need expensive local home talent in a foreign country to navigate through.

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Scale-Up Teams

Need expertise short term, augment your current management to chart a new thrust, get secure the favours and services of a new resource or venture partner, an new banking institution as a requirement to access emerging opportunities or enter into new markets.

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PlcCompliant Document

Compliant Business and Technology Counsel & Practice Solutions to Transition from Conventional Business to Compliant Business, Training Technical Advice, Coaching and Business Plans and Proposals geared to initiate and transform Individual Operations to Islamic Business with permissible products and services .

We provide such support, that assist in re-ordering, personal intention and conduct to re-orientate individuals to right conduct, compliance and permissible personal goal setting for planned successful outcomes..

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PlcCompliant Entity

We develop our own compliant models to deliver solutions in custom coaching and business plans geared to transform your Operations to Compliant Businesses with permissible products and services.

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PlcCompliant Financiers

We recommend your verified services to prospect clients to be Business Matched and in which activity you may re-purchase qualified performing loans of your choice for permissible financing and provide new opportunities.

Our services introduce you to a wider client base previously unknown to your right conduct, compliance and permissible corporate performance

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"business done by a man with his own hands and every, permissible commercial transaction"

We provide products through our custom programmes and arrangement with specific benefits and specific performance requirements in a roll-out.

Products are aesthetic, cost effective, energy lean, environmental sustainable and satisfies a specific trigger and user service proposition for the target demographic, be it individuals, companies, city chambers of commerce, industry sector interests, standing governments of countries or party interests of the same country

Getting off on the right foot requires a proven game plan. We do stagings that provide the raised the bar on performance for your company that allows you to achieve faster concept to target implementation, so that you don’t have to. We may be your best option in finding the best-fitting solution just-in-time.

Private

At the personal level the obligation is to (a) engage in halal professions and business activities. (b) Facilitate seamless transitions from conventional business practices to a Islam Compliant Practices; (c) Be a catalyst in the enhancement of permissible lifestyle businesses from concept to product delivery, and customer satisfaction.

Corporate

At the corporate level the obligation is to seek to (a) establish a system that facilitates such individual efforts and discourage their opposites in our community; (b) research, establish, and support, promote compliant Businesses activities; (c) increase the successful small to medium owner managers pool of entrepreneurs (d) transition and convert conventional business to compliance; (e) be an intermediary between diverse cultures; (f) be a bridge-builder facilitator in trade, commerce and business relations, on a best practices of Islam

Governorate

At the greater collective level we intend to be in the vanguard of establishing, maintaining and propagating Businesses Best Practice, based on Islam

THE FINE PRINT.

Business and it’s environment is risky beyond control, companies of all sizes are facing critical issues of resources and seek agile multi-skilled individuals and locations for economies of scale and everywhere life's dynamism creates new challenges.

HOW YOU ENGAGE US.

Recommendation or Expression of Interest Communication Product/Service Introduction.

Where We Are Intro To Company, We Conduct A Customer/Entity Readiness Evaluation to determine if we are a good fix

COMPETENCIES

These are issues which arise from the things clients are not so good at or, the things they are not sure how to do or they are not sure if they're dong it right or just the things they don't like doing or even some of the things they are good at - but it's no longer profitable to do it., or even some of the things that you are good at, but just cannot do now.

DELIVERABLES

Fixed Cost, Fixed Time, On Terms, On Time, First Time

SHARED RISKS/BENEFITS

Shared vision from risks framed in common terms, through shared costs and collaborative action that fosters the catalyses Shared opportunities for Shared benefits Custom Methods & Processes allows us to provide the deliverables exactly on requirements above 90% of the Time. 5% to 10% of the time, deliver according to adjusted deliverables..

COMMON TERMS

We work on common terms which ensures that if we do well, you do well and if you do not, we do not either.

If you do an early termination, you forfeit 50% of your fees. If We terminate Early, we return 100% of your fees.

THREE (3) DAYS

If perchance, you are not provided with your complete deliverable we will return 50% of We provide you with a respite of three (3) business days to sign off on our project after we have been paid – and if you are not satisfied with our solution, we will return 50% of your total fees

BILLNG TERMS

Billed fees are 100% earned and due.

GOLD STANDARD

Our standard fees rate is 4.5Grams of 99.999 purity gold per hour or the equivalent in your currency.(if we need a custom fee for your delivery it may be multiples of 4.5Grams or percentages of 4.5Grams

LIABILITY

Our declared liability is 50% the fees collected for our agreed solution.

WE DONT DO DISCLAIMERS

As Muslims involved in business and technology consulting, we rely completely on the tenets of Islam to determine our praxis and counsel, our business relationships, our products and our associates. Islam is its own culture, a way of life, a form of government, a social structure, as well as a regulatory norm for the full range of human and human/other relationships.

The conduct of business is no exemption.

Our socio-politico-economic-ethico*-moral theories should be consistent with guidance and instruction and the basis of all of them must be one. and when the Creator and His Messenger has made a decision, it is not for Mankind and ins to have an opinion on it

Islamic society preserves the notions of free enterprise and social solidarity, social responsibility and an alternative form of humanity for all.

This precedes and supersedes self-interest, and that also is the object of many specific guarantees in Islam

WEBSITE

On this site our descriptions are longer than many others, primarily because we know what we can do and it the declaration provides a clear indication of our capabilities, the value we exchange and what the standards and delivery options we should be held observed.

PRINCIPLES

We provide our solutions against the background of the Islamic Aadaabs Of Khidmat (Service To Others) of which there are three conditions of Kidmaat, viz.

Sincerity: The motive of rendering the service must be nothing other than Muhabbat (affection).

Congeniality:  The hearts of the Khaadim (the one who renders the service) and the Makhdoom (the one who is being served) should be at one. There should be congeniality (Munaasabat) between them. They should not be strangers.

Ability: The Khaadim should know how to render the service he is to undertake. | CEO.IKRIMAH - In Other Words We Will Not Take The Project Unless We Can Deliver. {iA}

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IKRIMAHPLC controls these sites from its offices in Singapore. You agree that any action proceeding, or other matters relating to your access to, or use of, the information on these sites shall be governed by Islamic Laws and permissible Singapore law. Here you choose (a) compliance and confidence with