Musharaka

Musharaka is an agreement whereby the Customer and Badr agree to combine financial resources to undertake any type of business venture, and agree to manage the same according to the terms of the agreement. In Permanent Musharaka (equity participation) Badr invests in partnership with the customer and continues to be invested as long as the Musharaka continues. In Diminishing Musharaka (long term financing) Badr’s share in the equity is diminished each year through partial return of capital. InTemporary Musharaka (working capital financing) a form of working capital financing, Badr invests for a short specific period of time, and receives it’s invested capital plus profits thereon at the end of an agreed period.

Areas of Application

Musharaka financing is very flexible and can be used to finance domestic industry, working capital finance and trade financing - imports and exports.  Musharaka is good substitute for short term corporate facilities as provided by conventional banking in addition to overdrafts or running finance, short-term financing, bridge financing and/or project financing