What is ISTISNA?

Istisna is a contract in which the client, as "Final Purchaser" or "Project Owner", wishes to acquire a good requiring a manufacturing process 1 . The bank, as "Seller" or "Project Manager", undertakes to purchase the raw materials and deliver the goods to be manufactured according to a predefined description of the characteristics of the product, at a price fixed and payable according to the terms and conditions agreed to in the Contract.

Main Characteristics of ISTISNA

ISTISNA allows the Islamic Bank to provide assistance in the context of construction, repair, development and finishing of mass works. It also makes it possible to finance the construction of production, transport and consumption equipment on order from users and/or resellers.

Applications of ISTISNA

ISTISNA can be used to finance real estate projects, hospitals, schools and universities, etc. It can also be used for the development of residential or commercial areas and for the financing of high-tech industries such as aeronautics, maritime industry, etc.

Advantages of ISTISNA

ISTISNA offers the possibility of financing projects and goods requiring a fairly long manufacturing process in accordance with specifications. It also offers ease of payment with different payment methods.

Implications and Considerations

ISTISNA is an appropriate formula from a religious and economic point of view to finance various government projects. It is defined as a contract by which the client, as “final purchaser” or “project owner”, seeks to acquire a good requiring a manufacturing process.

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