The Islamic LARIBA trade-financing model used is the Cost-Plus (CP) or Murabaha. It can be used as a substitute for working capital short-term RIBA financing used in the conventional banking system

In this model, the person buying the goods would ask the Islamic LARIBA finance company to buy such goods on his/her behalf. Then, the Islamic LARIBA finance company sells it back to him/her for the cost plus a pre-agreed upon profit.

The pay back schedule is agreed upon among the parties involved. The profit element is arrived at INDEPENDENT of any interest charges. It is arrived at based on negotiations between the Islamic finance company and the person involved.

Cost-Plus (Murabaha) can be used in import/export, purchase of raw materials and financing inventory

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