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.

MUZARAH

Definition

Crop sharing is to give the land to whoever can cultivate it or work in it in exchange of a share in the crop. This transaction achieves the interests of both parties (the land owner and the agent). The land owner may not be able to cultivate its land or work in it. The agent may not have the land he needs to employ its resources.

Muzara'ah is a cultivation (plantation) partnership between a land owner and a farmer in which the former provides a piece of land and the latter contributes efforts and expertise to grow a crop therein. The total yield (ghallah) of the land is divided between the two partners according to specific percentages.

On the other hand, mukhabarah is a type of sharecropping whereby a plot of land is rented for part of its yield (ghallah). It is a type of agreement in which the worker (farmer) supplies seeds, in addition to his labor and expertise, and the landlord provides, through lease (ijarah), the plot of land to be ploughed in preparation for sowing seed and growing crops. Mukhabarah may also involve cultivation of a sowed land in return for a specific portion of its produce. The rent is paid in kind from the land's produce.

In short, muzara'ah is a form of partnership (musharakah) between capital (land) and labor in which total yield is divided between the two partners, while mukhabarah is a type of ijarah in which rental (ujrah) is paid out of the lease land's yield.

MUZARAH

Application

1. Establishing a Muzara'a Contract:

The land owner gives the land to the farmer.

The farmer receives the land to work on it, with his effort and experience.

2. The results of the Muzara'a:

The two parties await the produce of the land to divide it.

3. Return of the land to the owner:

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.

4. Distribution of the resultant wealth:

In case the crop fails, the land owner loses the utility of the land and the farmer loses his efforts.

In the case of good crop, the produce shall be divided in the ratios they stipulate and agreed upon.

MUZARAH

Rules

1.It is a condition in Muzara'a that the land must be available and the owner must move out of the land so that the farmer can work without hindrance and it is a condition that the crop to be cultivated must be specified.

2.It is a condition to specify the kind of seeds to be sown. The seeds may be provided by the owner of the farm according to the prevailing norm.

3.It is a condition that the Muzara'a period must be known and sufficient for the cultivation of the land and harvesting the crop.

4.It is a condition that the Muzara'a period must be known and sufficient for the cultivation of the land and harvesting the crop.

5.It is a condition in Muzara'a that the two parties share the produce and the share of each partner is a known pro rata ratio in the total. It is invalid to stipulate a specific amount of the produce to either partner, because that may hinder the realization of partnership.

6.The transaction shall be invalid if the share of either partner is something other than the produce, because Muzara'a is not an absolute lease; it can be considered as a kind of land lease in exchange of the produce.

7.The produce is divided according to the ratios the two parties stipulate and agree upon. In case of crop failure neither shall get anything. The farmer loses the effort and the land owner loses the utility of the land.

8.Every thing that is necessary for Muzara'a as tending the farm shall be borne by the farmer because it is in the contract. All expenses on the crop shall be borne by the two parties in ratio to their shares in the produce, because that is not part of the Muzara'a work so as to be the concern of the farmer

MUZARAH

Evidence

The jurists consider the Muzara'a permissible for the following:

1.Related from the Messenger (Allah's blessings and Peace be upon him), that he delivered to Khaiber Jews the palm trees in Khaiber as Musaqah (tend the trees and have a share in the yield) and the land of Khaiber as Muzara'a.

2.The Messenger of Allah (PBUH) dealt in Muzara'a with Khaiber people.

3.Muslims made some Muzara'a transactions during era of the companions and the year that followed. None of them denied its legality, then it because a consensus (Ijama).

MUZARAH

Methods

1. Establishing a Muzara'a Contract:

The land owner gives the land to the farmer.

The farmer receives the land to work on it, with his effort and experience.

2. The results of the Muzara'a:

The two parties await the produce of the land to divide it.

3. Return of the land to the owner:

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.

4. Distribution of the resultant wealth:

In case the crop fails, the land owner loses the utility of the land and the farmer loses his efforts.

In the case of good crop, the produce shall be divided in the ratios they stipulate and agreed upon.

MUZARAH

Products

Farm Products, produce, animals

MUZARAH

Feature

There are two forms for Muzara'a. Crop sharing as regards which party supplies the seeds and machinery, the two parties may agree on that;

1. The land owner supplies the seeds and the machinery and becomes the employer of the worker who works on the land in exchange of some of the produce. The aim of this contract in this case is the work of the agent.

2. The agent supplies the seeds and the machinery and becomes a tenant in exchange of some of the produce. The aim of this contract in this case is the benefit of the land.

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.

July 15, 2010 | By John Foster, former editor, Islamic Business & Finance magazine

The Islamic finance industry has often battled with the question: How Islamic is Islamic banking?

The question's pertinence was raised in March last year, when Sheikh Muhammad Taqi Usmani, of the Accounting and Auditing Organization for Islamic Finance Institutions (AAOIFI), a Bahrain-based regulatory institution that sets standards for the global industry, said that 85% of "SUKUK" , or Islamic bonds, were un-Islamic.

Usmani is the granddaddy of modern-day Islamic finance, so having him make this statement is synonymous with Adam Smith saying that free-markets are inefficient. Because "SUKUK" underpin the modern-day Islamic financial system, one of its pre-eminent proponents arguing that the epicentre of the system was flawed sent shockwaves through the industry. It also gave ammunition to the many critics who see Islamic finance as an industry more driven by cultural identity than practical problem solving: as a hodgepodge of incoherent, incomplete, impractical and irrelevant ideas.

RECOGNIZABLE PRODUCTS

The products that modern-day Islamic bankers have created are very similar to conventional products. So similar, in fact, that to an outside observer they could be considered the same. Islamic banks now offer Islamic mortgages, Islamic car loans, Islamic credit cards, Islamic time deposit and guaranteed return accounts, Islamic insurance and some even offer Islamic managed and hedge funds.

This point is conceded by Samir Alamad, Sharia, or Islamic law, compliance and product development manager of the Islamic Bank of Britain. “The industry does not want to alienate its products,” he says. “They have to be recognisable, produce the same outcome as conventional products, but remain within the guidelines of Sharia.”

NO INTEREST

Are Islamic Bonds Different?

By Dr. Faleel Jamaldeen

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.

Rewarding investors for "SUKUK"

With "SUKUK" , the future cash flow from the underlying asset is transferred into present cash flow. "SUKUK" may be issued for existing assets or for assets that will exist in the future. Investors who purchase "SUKUK" are rewarded with a share of the profits derived from the asset. They don’t earn interest payments because doing so would violate sharia

Repurchasing "SUKUK" at maturity

As with conventional bonds, "SUKUK" are issued with specific maturity dates. When the maturity date arrives, the "SUKUK" issuer buys them back (through a middleman called a Special Purpose Vehicle).

However, with "SUKUK" , the initial investment isn’t guaranteed; the "SUKUK" holder may or may not get back the entire principal (face value) amount. That’s because, unlike conventional bond holders, "SUKUK" holders share the risk of the underlying asset. If the project or business on which "SUKUK" are issued doesn’t perform as well as expected, the "SUKUK" investor must bear a share of the loss.

Most sharia scholars believe that having "SUKUK" managers, partners, or agents promise to repurchase "SUKUK" for the face value is unlawful. Instead, "SUKUK" are generally repurchased based on the net value of the underlying assets (each share receiving its portion of that value) or at a price agreed upon at the time of the "SUKUK" purchase.

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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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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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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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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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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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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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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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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