Murabahah

A sale at a disclosed cost plus markup, widely used in Islamic banking in place of lending.

Also written · Murabaha · Bai murabaha · Murabahat · Morabaha · Murabaha financing · cost plus sale · markup sale · Islamic mortgage · Islamic finance · halal mortgage

The meaning

What Murabahah means in Islam

In its classical form the seller states what the goods cost him and what profit he is adding, so the buyer knows both figures. Modern banks use it to finance purchases: the bank buys the asset, then sells it on to the customer at a higher price payable in instalments. Supporters point out that the bank takes real ownership and real risk in between; critics answer that the outcome tracks interest too closely, and the disagreement among scholars is genuine and unsettled.

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