Istisnaa

Istisna is a sale contract between two parties whereby the underlying project requires financing for completion. Istisna is the Islamic mode of financing facility that could be used for financing construction projects, industrial equipment and various capital goods

Areas of Application:

Istisna can be useful in the case of contractor financing and project finance. Istisna contracts are used to offer finance for companies operating in asset- intensive industries like aircraft, locomotive, ship building industry, real estate and similar industries. The Istisna contract is also applied in the construction of residential buildings, schools, hospitals and other areas that support the development of society.  Istisna is generally used in combination with longer-term Islamic modes such as Ijarah to cover the entire scope of the financing at hand