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Islamic Finance

  Islamic Finance   |   Terms
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  • April 3, 2022
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Murabaha Guarantee

In a murabaha to the purchase orderer (MPO) transaction, it is permissible for the purchaser (creditor) to ask the purchase orderer (debtor) to post a guarantee that will enhance underlying credit. The two parties need to agree on the acceptable form of guarantee at the time of contracting. It is allowable that the underlying items of murabaha be used as a form of guarantee, among others.


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