Islamic Loan

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Islamic Loan

A loan that interest cannot be charged on. Instead, the loan is structured using discounts, sale or lease, profit participation, or repurchase agreements.

Islamic Loan

Any form of financing made according to Islamic law, which forbids the payment or receipt of interest. An Islamic loan may be an interest-free loan, but often it is a more complex transaction. For example, a bank could buy an asset for cash and then re-sell it to the "borrower" for a profit such that the profit is the same as the bank would have made had it extended a regular loan. Other types may involve the bank becoming a partner with the "borrower" so that both co-own the asset or business that the loan finances, and the borrower gradually buys the bank's share of ownership with a series of payments. Strictly speaking, most Islamic loans are partnerships or joint ventures, but they are called loans because they accomplish much the same thing as conventional loans. See also: Islamic finance, Murabaha, Mudharaba, Musharika.
References in periodicals archive ?
The deal was done as a murabaha , a cost-plus-profit arrangement which is one of the most popular formats for structuring Islamic loans.
Banks in the six-nation Gulf Cooperation Council (GCC) have reported an increase in Islamic loans.
9 million) via Islamic bonds, the largest domestic private placement of sukuk, as it shifts away from relying mainly on syndicated murabaha Islamic loans from other banks to finance its operations.
The value of Islamic loans is growing at an annual rate of 40 per cent, which is likely to increase.
Loan growth accelerated to 34 per cent in 2013 against seven per cent for the industry with Islamic loans increasing to eight per cent of total system loans.
Loan growth accelerated to 34% in 2013 against 7% for the industry with Islamic loans increasing to 8% of total system loans.
Loan growth accelerated to 34 per cent in 2013 against 7 per cent for the industry with Islamic loans increasing to 8 per cent of total system loans.
Islamic banks typically obtain their funding from retail deposits and short-term syndicated Islamic loans, but subordinated deals are increasingly being used as Basel III global banking standards are phased in across the globe.
Noor ranked number one in the latest Bloomberg's full year 2013 EMEA Islamic Loans Book.
In addition, we have arranged bank finance and Islamic loans for our clients to the tune of approximately $1 billion since 2006.
Islamic loans are particularly dependent on the quality of institutions because their implementation involves more legal costs than those associated with conventional loans.
murabaha Islamic loans, secured through both local and international banks.
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