Islamic Loan

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 ?
Mobily has combined three existing facilities into a new, four-tranche Islamic loan.
Islamic loan and bond data not included in this quarter's tables due to low levels of activity
Gulf Finance House (GFH) has appointed Deutsche Bank to arrange the refinancing of a $300 million Islamic loan that matures in early 2010, according to a report.
2 billion, two-year Islamic loan via mandated lead arranger Emirates Islamic Bank, a banking source said yesterday.
25 billion riyals ($600 million) Islamic loan guaranteed by its parent company.
Proceeds from the issue are to be used for Islamic general corporate purposes and to fund the lender's Islamic loan book growth.
5 billion Islamic loan that signed in 2007, bankers close to the deal said.
The company, which is raising an $800m one-year Islamic loan after borrowing $600m in August, is likely to sell at least $800m of Islamic bonds, or sukuk, in the second quarter to refinance debt, Khedr said.
A senior IBA executive said at the end of 2012 that the bank was planning to raise a $150 million Islamic loan in 2013 and double its Islamic banking assets to $120 million by the end of this year.
A spokesman for GFH, which is also currently seeking to refinance a $300 million Islamic loan maturing next year, declined to give further details of the planned rights issue.
Chemical maker Huntsman Corp and Saudi Arabia's Al-Zamil Group have raised $195 million through an Islamic loan to finance a petrochemical plant in the kingdom.
MANAMA - Bahrain's Ithmaar Bank has signed a five-year $167 million Islamic loan facility with Ahli United Bank, it said on Monday.
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