The business undertaken by the Modaraba
falls under four areas:
Leasing
The
Modaraba extends operating lease finance in accordance with
Islamic Sharia comprising of plant and machinery, office
equipments, medical equipment, computer hardware for the
commercial, health and education sector, vehicles both
commercial and personal and project related buildings. As a
step forward Modaraba Al-Mali also undertakes a more
challenging filed of small and medium sized project leasing
under supervisory participation.
Morabaha
Over the few recent years Modaraba Al-Mali has
increased its portfolio with this mode of cost plus
financing. Morabaha financing has been extended to small and
medium sized establishments for the import and export of
rice, spices, chemicals, pharmaceuticals, yarn and various
perishable and non perishable goods which are allowed under
the principle of Islamic Sharia. The flexibility in terms of
payment include 3,6,9,12 month options as well as a bullet
payment. Since this financing is a sale on deferred payment
basis the securitization cover is obtained by the Modaraba
by way of Registered/Equitable Mortgage of property, readily
realizable blue chip securities or hypothecation of fixed
assets.
Musharika
Modaraba Al-Mali
prefers and promotes this type of financing since Shirakat
is considered as one of the nearest to Allah Subanallah wa
Tallah. Modaraba Al-Mali scrutinizes the viability of the
project idea objectivity and gives a whole hearted support
to implement the project and offers to like minded private
entrepreneur who are able to invest 40% of the cost of the
project from their own resources. This scheme operates on
the foundation of profit and loss sharing and is recommended
for prospective entrepreneurs who prefer to operate
independently and also those who would like to involve
Modaraba Al-Mali in business planning, marketing, finance
and human resources selection.
Underwriting /
Investment
Underwriting of public issues and
investment in shares of sound joint stock companies and
non-interest bearing securities is another major activity
undertaken by the Treasury Department consisting of highly
trained human resources.
Although the Modaraba’s
permissible business operations consist of above four areas
it has mainly concentrated on lease financing activity. The
lease financing, therefore, constitutes the core business
while commercial funding on morabaha basis is provided by
the Modaraba on limited scale understanding not invoke in
interest based financing.
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