Investment House

Structured Finance

We specialize in structured Islamic finance, guided by our Shari’a principles. Our Islamic finance division provides the following products and services:


A Sukuk is a financial certificate that can be viewed as the Islamic equivalent of a bond. However, fixed income, interest bearing bonds are not permissible in Islam, hence Sukuk’s are securities that comply with the Islamic law and its investment principles, which prohibit the charging, or paying of interest. Financial assets that comply with the Islamic law can be classified in accordance with their tradability and non-tradability in secondary markets.

Murabaha (Cost-plus financing):

Murabaha is probably the most well known and widely used Islamic contract. Under this arrangement, IH, upon instruction from the customer, purchases and takes title to equipment or goods from a supplier. IH will either make the purchase directly or through an agent, if IH does not wish the purchased goods to become part of its balance sheet. IH then sells the equipment or goods to the customer at Cost plus an agreed mark-up, which is intended to reflect a reasonable profit. Deferred payment terms may be agreed and the arrangement is not considered contrary to Shari’a because, by taking title to the equipment or goods, IH is assuming the risks of ownership, and so is entitled to a profit.

Ijara (Lease Financing):

The ijara contract is similar to a conventional lease. It can be used in the leasing of machinery, equipment, buildings among other assets. Ijara is a contract under which IH (or a special purpose vehicle) purchases and leases out an asset or equipment required by its client for an agreed rental fee. This fee can be fixed in advance or be subject to occasional review. During the rental period the leased asset remains under the control of IH, which is responsible for its maintenance and for ensuring that it continues to provide the service for which it was rented. Since IH assumes the risk of ownership, in practice, it will seek to mitigate such risk by insuring the asset in its own name. Under an Ijara contract, IH has the right to re-negotiate the rental amount at agreed intervals. This is to ensure that rent remains in line with current market leasing rates and the amortized value of the leased asset.

Salam (Advance Purchase):

The Salam contract is defined as the advance purchase of specified goods with full pre-payment. This contract is regularly used for financing agricultural production.

Istisna’a (Commissioned Manufacture)

Istisna’a is a variant of the Murabaha contract. It can be used for the advance funding of major industrial projects or large items of equipment such as ships or aircrafts. IH funds the supplier during the construction of the equipment, acquires title to generic viagra online the equipment upon completion and immediately passes title to the customer on agreed deferred payment terms. Essentially, one party buys the goods and the other party undertakes to manufacture the goods, according to agreed specifications.