Why may cost-plus sale (مرابحة), leasing (إجارة), advance-purchase sale (سَلَم) and Istisna‘ be used in Islamic finance?
The Basic Idea of Islamic Financing
- They may be used in areas where partnership (مشاركة) or investment partnership (مضاربة) is not workable or feasible
- They are all different names for the same interest-bearing loan
- They remove the need for contractual conditions
- They are used only for charitable donations