Islamic Business Model

Islamic Business Model – Musharakah Refinancing
SHARIAH STRUCTURE OF ISLAMIC BUSINESS PRODUCT OF PMRC

 

PRODUCT STRUCTURE:

  • Islamic Mortgage Business of PMRC is based on Shirka-tul-‘Aqd.

 

SHIRKAT-UL-AQD (BUSINESS PARTNERSHIP):

  • Shirkat-ul-‘Aqd (Business Partnership) means an agreement between two or more parties to combine their assets, labour or liabilities for the purpose of making profits and bearing loss (if any).

 

MUSHARAKA MORTGAGE POOL CREATION:

  • PMRC shall purchase mortgage assets at agreed rate.
  • Customer shall create special pool and comingle his share.
  • Risk of these assets will be shared proportionately.
  • The reward from these assets will be shared proportionately up to a ceiling amount, and as per the agreed ratio above the ceiling.

 

PROFIT & LOSS SHARING MECHANISM

  • The profit and loss sharing mechanism is determined according to the principles of Shirkah-tul-‘Aqd.

 

DIFFERENCES BETWEEN ISLAMIC AND CONVENTIONAL REFINANCE PRODUCTS OF PMRC

 

CONVENTIONAL BUSINESS ISLAMIC BUSINESS
Conventional Business just lends to its customer actually a loan contract.  Islamic Business purchases assets and create joint enterprise through Musharakah – Shirkah-tul- ‘Aqd.
Conventional Business has no Shariah Compliant assets in its ownership.  Islamic Business has Shariah Compliant assets through purchases of the existing mortgage assets portfolio.
Charge interest. Islamic business earns profit through rental agreement.
No loss will be borne. Islamic Business may suffer from loss according to the spirit of Musharakah – Shirkah-tul- ‘Aqd.
Conventional Business charges Interest as income.  Islamic Business earns profit from Musharakah Pool as per agreed profit-sharing mechanism.
Penalties may be charge for late payment as income. Charity may be applicable for late payment for charitable purpose (note: not an income of PMRC).
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Last Updated on:October 29, 2025 at 7:47 am