Murabaha Financing at Bank-e-Millie Afghan (BMA)

Bai-Murabaha is a Sharia-compliant financing solution offered by Bank-e-Millie Afghan (BMA) to help businesses meet their funding needs while adhering to Islamic financial principles. The Murabaha financing method is designed to facilitate the purchase of commodities, ensuring that the transaction is both transparent and permissible under Islamic Law. The financing is based on the principle of cost-plus-profit, where the Bank purchases the Requested Goods and sells them to the Customer at an agreed upon price that includes a profit margin.

How Murabaha Financing Works

• Customer request: The Customer initiates the process by approaching the Bank with a financing request for specific commodities required for business operations.
• Application and approval: The Customer submits a Financing Application, and the Bank reviews the request based on factors such as the Customer's cash flow, business history, and the collateral provided. The Bank determines the financing limit and approves the application accordingly.
• Bank purchases commodity: After approval, the Bank purchases the requested Commodity from a local or international supplier, ensuring full ownership of the goods.
• Agreement and sale: A Murabaha Agreement is signed between the Bank and the Customer, which specifies the sale price, the profit margin, and the repayment schedule. The Bank transfers ownership of the commodity to the Customer.
• Payment: The Customer pays the Bank in installments as agreed upon in the Murabaha Agreement. The total payment amount includes the principal cost of the commodity plus the agreed upon profit margin. The maximum payment period is up to five years, based on the Customer’s business payment capacity.
• Ownership risk and reward: Once the commodity is transferred, the Customer assumes ownership and the associated risks and rewards.

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Eligibility Requirements for Murabaha Financing

To qualify for Murabaha Financing, businesses must meet the following requirements:

• Company License: A valid and active company license.
• Company's Articles of Association (AoA): A copy of the Company's Articles of Association.
• Identification of key personnel: Copies of ID cards for the Company's President, Deputy President, and Shareholders.
• Two year Audited Financial Statements: Audited Financial Statements for the last two years, verified by one of the Bank's affiliated entities.
• Three year Projected Financial Statements: A detailed Financial Projection for the next three years.
• Official request: A formal written Request on the Company’s letterhead, signed and sealed by the President or Vice President.
• Board Resolution: Approval from the Company’s Shareholders (via a Board Resolution) to obtain financing and appoint a competent individual to sign all financing documents.
• Bank Statement: A Bank Statement for the last 12 months.
• Company Profile: A History or Profile of the Company, detailing its operations, achievements, and market position.
• Taxpayer Identification Number (TIN): The Company’s TIN.

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Why Choose Murabaha Financing?

• Sharia-compliant: Fully in line with Islamic Law, ensuring that the transaction is ethical and permissible.
• Clear terms: Transparent profit margin and repayment terms agreed upon at the outset.
• Flexible repayment: Repayment schedules are tailored to the business’s cash flow and financial capacity, with a maximum term of five years.
• Sharia-compliant Collateral: The Bank ensures that all transactions are supported by valid and legally recognized Collateral.