Types of Financing

Each Customer has his/her own preference. Some would like to have a fixed cash outflow throughout the finance term. Others would like to have variable outflow in the monthly installment in order to get benefit from change in market rates. Currently Sakana provides the following types of financing:

Ijara
Under Ijara financing, Sakana will purchase the property from the Seller. Instead of selling the property to the Customer, Sakana will lease it to the Customer for an agreed period. At the same time, Sakana will promise to sell the property to the Customer as long as the Customer fulfills all terms and conditions specified in the lease agreement.

The significant feature is that the assets remain the property of Sakana. Over the term of the finance, Sakana becomes the landlord and Customer assumes the role of a tenant. During this period, the Customer makes monthly rental payments including contribution towards the purchase price of the property (capital).

In Ijara, the monthly payment i.e. rental may differ every 6 months. The reason for this is that the rental charges will be pegged against the Benchmark Rate of Sakana which will change on a 6 monthly basis. Therefore, there might be fluctuations in a Customer’s financial planning.

Murabaha
Under Murabaha financing, Customer will identify the property that he/she wishes to buy and Sakana will purchase it on his/her behalf from the Seller. Sakana will then resell the same property back to the Customer (inclusive of Sakana’s profit margin) with a deferred payment plan i.e. Customer to pay Sakana in equal monthly installments over the agreed tenure.

Murabaha is best suited for a customer who wants to have a fixed cash outflow throughout the financing tenure. The monthly installment for Murabaha will be fixed up front and you will know the amount of your commitment from the very first day. In short you can budget your finances better, since you will know exactly how much you will have to pay each month.