Published On Mar 11, 2020
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Murabahah is a type of Islamic financing where the seller agrees to sell an asset to the buyer at a markup price. The markup price includes the cost of the asset plus a predetermined profit margin for the seller. The buyer then pays for the asset in installments over an agreed-upon period of time. Murabaha Contract is often used in Islamic banking and finance as an alternative to interest-based financing. Unlike interest-based financing, Murabahah is not considered to be riba (usury) under Islamic law. This makes it a popular choice for Islamic financial institutions.
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