Financing Leasehold Purchase of Retail Stores

Syria International Islamic Bank provides a scheme to finance the leasehold purchase of retail stores, according to the following:
•    The merchant (customer) applies to the Bank for financing the purchase of the store's leasehold, then SIIB purchases the leasehold of this property in accordance with its policies and procedures.
•    SIIB then sells the store's leasehold to the customer at a price - that includes a pre-agreed profit - payable by the customer as installments over a period of up to 5 years.

Terms and features

•    The maximum amount of the financing is 70% of the property's value.
•    The maximum repayment period of the financing is 5 years.
•    The monthly installments cannot exceed 40% of the client's monthly income.
•    To grant this financing, the Bank will require a real-estate collateral of a property other than the purchased leasehold.
•    Competitive rates.
•    The property must be registered in the permanent or temporary record.
•    The financing is granted according to the Bank's terms and conditions.


In this contract the Bank as (Rab Al-Mal) pays to its client (Al-Mudareb) a certain amount of money to invest in a business where the profit is distributed between the Bank and its client upon a pre-agreed sharing ratio while the Bank bears the whole loss as (Rab Al-Mal), provided that no negligence or infringement is committed by the client whose loss is only limited to his/her efforts invested in the business.
Before financing a Mudaraba contract, the Bank should investigate the client's ability and qualifications to conduct the business. The Bank should also specify the capital of al-Mudaraba and the profit sharing ratio between the Bank and the client (Mudareb) where the profit sharing must be a percentage and not a pre-specified amount.

Salam Contract

A forward sale contract where advance payment is made for goods to be delivered later. The goods sold do not exist at the time of concluding the contract but the actual specification of the goods including the quality, size, price, and description must be specified and agreed upon in the contract. Thus, the goods price is paid in advance and the delivery will be delayed to a specific date provided that the goods can be delivered at that date. Salam sale contract is definite and does not contain the option of condition to any of the contract parties.
The Bank sign Salam contracts to purchase goods that will be delivered later for advance payment and re-sell goods similar to what he bought to a third party through a parallel Salam contract without any link between the two contracts.

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