An Arabic term (بيع بالثمن الآجل) that translates as “sale with deferred payment” or “sale on credit”. Technically, it refers to a sale transaction in which the payment of price is deferred to a future date or is made in installments over a future period of time. In this sense, ba’i al-murabaha, if the buyer seeks whereby access to credit, is one type of ba’i bi thaman ajil (however, in murabaha, the seller is under obligation to reveal his actual cost to the buyer).
It could also imply a sale deal whereby a person sells an item/ article/ property for cash but buys it back on deferred payment for a higher price. As such, the seller will have access to immediate cash which needs to be repaid with an increment at a future date (if there is no third party to the transaction, the sale would be tantamount to ba’i al-inah, which shari’a prohibits). Some traders/ individuals resort to this form of buy-back in order to circumvent interest. Unless the transaction has three parties (a buyer, a seller, and another buyer or seller) as in tawarruq, it will still be based on interest payment or receipt.
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