Alizz Islamic Bank has enabled salaried individuals to access commercial finance for personal businesses via their salary.
New shari'ah-compliant commercial financing solutions have the advantage of purchasing different goods, including equipment, machinery, vehicles or even property through murabahah, ijarah or forward ijarah options.
Murabahah allows customers to buy equipment and goods and land at competitive prices whereas ijarah solutions help businessmen to finance ready properties. Forward ijarah helps them to finance the construction of facilities at competitive prices.
Under murabahah, the bank will purchase the asset from the seller based on the customer's request and sell it to the customer at cost plus the agreed profit rate, concluding the murabahah sale contract. The most important feature of this product is that the customer will know the profit markup and installments at the time of signing the deal. Another feature is that the murabahah cost remains unchanged throughout the term. Moreover, the customer takes possession of the goods immediately.
Under ijarah, the customer will be given the right to utilise or lease the property for a specific period while the bank remains the property owner. The bank will buy the property from the developer or seller and lease it out to the customer with a promise to sell it at the end of the lease term.
In Forward ijarah, the property is acquired by Alizz Islamic Bank under an istisna sale contract with a developer upon the customer's promise to lease. Istisna refers to a sale where a commodity or property transaction takes place before that commodity or property even comes into existence. This essentially means that a company is told to manufacture a specific commodity or build a property for the purchaser.
Once the construction process is completed, the property will be delivered to the customer based on rental conditions. At the end of the lease term (or upon maturity date) and once the obligations stated in the forward ijarah contract have been fulfilled, the bank will transfer the ownership of property to the customer at a nominal sale price on the basis of a separate sale contract.
Interested?
The financing options are available to Omanis working in government or semi-government agencies as well as those working in the private sector. The minimum salary is OMR500 for government and semi-government employees and OMR750 for those working in the private sector. The application procedure is easy and fast with simple documentation requirements.
Applicants seeking financing must be between 21 and 60 years old. Murabahah-based financing options for equipment and vehicles are available from OMR5,000 to OMR100,000. Ijarah-based financing options start from OMR50,000 to a maximum of OMR700,000.
Murabaha-based finance contracts last seven years while ijarah conracts are nine years long, excluding a 12-month construction period. An applicant can get up to 80% of finance for the costs of equipment, vehicles and property, and 100% on the cost of commodities.