Murabaha

Murabaha is a financial agreement commonly used in Islamic finance, where a seller discloses the cost of an item and adds a profit margin, selling it to a buyer at that higher price. The buyer pays this price in either a lump sum or through installment payments. Importantly, the transaction does not involve interest, aligning with Islamic law (Sharia), which prohibits usury. Murabaha is often used for purchasing goods or assets, allowing buyers to acquire them in a way that is compliant with ethical and religious guidelines.