Under the scheme, Alizz Islamic Bank will enter into a
Diminishing Musharaka Agreement with the customer,
whereby; each party contributes into the Musharaka
Capital with a certain percentage to construct the asset
jointly. The bank's and the customer's common portions
in the Musharaka asset shall be divided into equal
Upon completion of the construction of the property,
the bank shall start selling its share to the customer
through sale of the Bank’s shares.
The customer shall purchase shares of bank's portion from time
to time by paying the sale price in installments. Accordingly, at
the maturity of the Musharaka, the Bank's portion in the asset
shall transfer to the customer, thereupon; the customer shall
be deemed the sole owner of the asset.
Forward Ijarah is a form of lease which ends with transferring the ownership of the asset (subject of the contract) to the customer on maturity and upon meeting all its obligations under the Forward Ijarah Contract. The property, which does not exist at the time of signing the Forward Ijarah Contract, may be acquired by the bank under Istisna Sale Contract or any other Shari'a compliant mode of finance with the developer/contractors. At the end of the construction period the property is delivered to the customer as per the terms of the lease agreement. At the end of the lease term (i.e. on maturity) and upon meeting all obligations under Forward Ijarah Contract, the bank will transfer the ownership of the property to the customer for a token sale price under a separate sale contract.