Bank Nizwa SME Murabaha Financing helps you meet the short-term financing needs of your business. Based on the Sharia concept of Murabaha, we purchase the goods you need, directly from the seller – and after we own it, we offer to sell the goods onwards to you on ‘cost-plus-profit’ basis. You make periodic instalment payments on the Murabaha sale price and, on maturity, the financing is settled.
Wakala Bil Istithmar
Wakala Bil Istithmar can be used by you as a short to medium and long-term working capital financing tool. The Bank, in its capacity as the Principal (the “Muwakkil”), appoints you as its Agent (the “Wakil”) to manage the investment amount in Sharia compliant activities that may be entered into, as agreed, by the Wakil on behalf of the Muwakkil.
Long Term Financing for Capex
Under this mode of financing, both Bank and you contribute capital and agree to a profit-sharing ratio. Capital here does not necessarily refer to cash. It can also be capital-in-kind. This financing method is used for creation or purchase of Fixed Assets in the business. Once the asset is created or acquired, the share of the Bank in the asset is periodically bought back by you, thereby reducing the Bank’s share.
Ijara simply refers to a lease transaction. The Bank first buys the asset from a supplier, then leases it to you. Upon the expiry of the lease, the ownership of the asset is transferred to you.
Istisna’a is a contract of sale of specified items to be manufactured or constructed, with the obligation on the part of the manufacturer or contractors to deliver the items upon completion. This financing method can be catered to when the required items are still in-process or yet to be constructed.
Letters of Credit
Islamic Letters of Credit (L/C) are an undertaking by the Bank to make a payment to a named party against the presentation of the stipulated documents. Bank Nizwa can help you open L/Cs for your purchases, both sight and usance, as well as finance the LC for making payment to the supplier.
A Sharia compliant Letter of Guarantee based on the concept of Kafala is a written undertaking issued by the Bank on your behalf to the beneficiary that meets your business needs.
It includes the following types:
Foreign Exchange Services
Foreign Exchange, or Sarf, is a transaction in which one person buys an amount of a specific currency against an equivalent amount in another currency. At Bank Nizwa, we offer Spot and Forward (under Wa’ad contract) transactions for all major currencies.