ACTIVELY SHARE — Murabahah is one of the most profitable sharia transaction contracts, let’s learn it!
There are various types of sharia transactions that you can utilize, for example, murabaha. From the outside, murabahah looks like an ordinary lending and borrowing transaction.
However, the fact is that the murabaha contract scheme is much more transparent and benefits both parties.
In this discussion, ActivelyShare will discuss further about the meaning of murabahah, the types of murabahah, the pillars and conditions of murabahah, and its advantages.
Definition of Murabaha
While the murabahah contract in Islamic banking is an agreement between the customer and the bank in a sale and purchase transaction where the bank buys a product according to the customer’s request, then the product is sold to the customer at a higher price as the bank’s profit.
In this case, the customer knows the purchase price of the product and the bank’s profit.
Murabaha Legal Basis
The legal basis for murabahah is from the Qur’an and the consensus of the scholars.
Based on the National Sharia Council Fatwa No. 04/DSN-MUI/2000 concerning murabahah is the sale of goods that emphasizes the purchase price to the buyer and the buyer is willing to buy at a higher price as the seller’s profit.
The ijma of these scholars follows the rules that have been mentioned in the Qur’an. The legal basis for murabahah is Al-Qur’an letter An-Nisa verse 29, Al-Baqarah verse 275, Al-Ma’idah verse 1, and Al-Baqarah verse 280.
Difference between Murabahah and Mudharabah
Mudharabah and murabahah contracts are often said to be the same. However, they are two different types of contracts.
The difference between murabahah and mudharabah lies in the concept of the agreement and the determination of profit.
According to the definition of murabahah, it is a profit and purchase price transparency contract between the seller and the buyer.
Meanwhile, the mudharabah contract is a cooperation agreement between the owners of capital (shahibul maal) and business actors (mudharib) who have the ability to manage the business in a productive and lawful manner.
Meanwhile, the concept of determining profit on murabaha is determined at the outset by agreement.
Meanwhile, the return on mudharabah from the business will be divided between the investor and the actor after the results of the business are known.
Advantages of Murabaha Contract
Murabaha transactions have various advantages. The advantages of murabaha are as follows.
More Transparent Murabahah Transactions
First, the advantage of a murabahah contract is that the transaction is more transparent.
Due to the murabahah contract scheme, the seller is obliged to notify the buyer regarding the price of production or purchase of a product and agree on the profits received by the seller.
So transactions must be carried out in a trustworthy and honest manner.
Prioritizing the Interests of Two Parties
Second, the advantage of a murabahah contract is to prioritize the interests of two parties. In this agreement, both parties benefit equally.
Because the determination of the seller’s profit is agreed upon between the seller and the buyer. So that both parties can measure the profit that the seller deserves and the right price for the buyer.
Using the Repayment System, Not Interest
Third, the advantage of a murabahah contract is to use a remuneration system, not interest.
Murabaha financing is often used in Islamic credit where the bank buys the goods the buyer wants, then sells it at a higher price as profit according to the agreement with the buyer.
Furthermore, the advantage of murabaha is that the profit from the transaction is negotiable. If the buyer objected to the selling price of a product, then this can be negotiated with the seller.
Vice versa, when the seller is not satisfied with the amount of profit proposed by the buyer, the two can discuss to reach an agreement on the price.
Installments Paid According to the Agreement
Next, the advantage of the murabaha contract is that the installments are paid according to the agreement.
Murabaha transactions do not only regulate transparency, but installment payments are also discussed according to the agreement. The buyer can negotiate the nominal amount and the installment period with the seller.
Can be used for consumptive and productive activities Finally, the advantage of murabaha is that it can be used for consumptive and productive activities.
Murabaha financing is mostly done at Islamic financial institutions to assist customers in financing consumptive activities such as buying houses and productive activities such as business development.
Please read Islamic Financial Instruments Types
Types of Murabaha
There are two types of murabahah, namely murabahah with orders and without orders. The explanation of the types of murabahah are as follows.
Murabahah by Order
The first type of murabahah is murabahah by order. Murabahah transactions with orders are carried out after the product ordered by the buyer is obtained by the seller.
So the murabahah contract scheme is that the buyer orders the goods in advance. Then the seller produces or buys from the supplier, then sells it to the buyer with price transparency.
Murabaha without orders
The next type of murabahah is Murabahah without orders. This type of contract is a murabahah transaction carried out directly without waiting for an order for goods, because the product is already available.
Pillars and Terms of Murabaha
Before starting a murabahah transaction, you should identify the pillars and conditions of murabaha as follows.
Pillars of Murabahah
The pillars of murabahah are things that must be fulfilled before implementing this contract, which include:
- The object of buying and selling is in the form of a product or service
- Ijab Qobul
After the pillars of murabahah are fulfilled, then you must pay attention to the conditions of murabahah so that this contract runs legally according to sharia law, namely:
- Honest sellers inform buyers of the cost of a product.
- The agreement must be valid according to the pillars and principles of Islam.
- Free from usury.
- There is transparency from the seller to the buyer when a product has a defect.
- The seller must be frank regarding the acquisition process and all matters regarding the product, for example purchased on debt.
Example of a Murabahah Contract
In order for you to better understand this contract, Actively Share will present an example of a murabahah contract, which is as follows:
Sarif is a businessman who wants to buy a house from Mr. Ahmad, the owner of the house. Mr Ahmad explained that the purchase price of the house was Rp. 300 million and he would sell it for Rp. 500 million, so that the profit would be Rp. 200 million.
However, Sarif made an offer so that Mr Ahmad’s profit was Rp. 150 million so that the selling price was Rp. 450 million. Mr Sutaji accepted the offer so they both agreed that the murabahah price for the house was IDR 460 million, with installments of IDR 7.5 million per month.
That’s a complete discussion from Actively Share regarding the meaning of murabahah, its benefits, types, pillars, and conditions! Murabaha is one of the most profitable sharia transactions that you should try.