Murabaha Financing

Murabaha to the Purchase Order (cost plus): It is a sale of commodity for the price at which the seller (Oromia International Bank) has purchased it, with the addition of stated profit known to both the buyer and seller.

Any customers who are involving in the following business activities can get Murabaha financing services.

  • Import and export business activities;
  • Tangible commodities;
  • Transportation services and who buy vehicles for him/herself or buy vehicles for rent;
  • Raw materials or inputs for industrial production.

Unique Features and Benefits

  • It is a pure sharia compliant financing service;
  • It is a sale of a commodity for a deferred price which includes an agreed profit added to the cost;
  • The Bank must have a title to the commodity before he sells it to his client;
  • The commodity must come into possession of the bank, whether physically or constructively;
  • The sale cannot take place unless the commodity comes into the possession of the seller but the seller can sign an agreement to sell even when the commodity is not in his possession;
  • The bank itself purchases the commodity and keeps it in its own possession or purchases the commodity through a third person appointed by it as agent before selling it to the customer;
  • Repayment through easily affordable installments;
  • Short-term to medium-term financing;
  • The Bank may ask collateral for this kind of service.