1. The structure used
Transactions arranged through Bysmillah use a Murabaha — a cost-plus sale. The seller, who already owns the vehicle, sells it to the buyer at a price made up of a disclosed cost and a disclosed markup, payable over an agreed period.
Where the seller genuinely cannot establish a reliable cost basis — for example an older vehicle held for many years with undocumented expenditure — the transaction may instead be completed as a Musawama, a negotiated-price sale in which only the final price is agreed. In that case the seller must tell the buyer in writing that cost is not being disclosed and why.
2. Why this is a sale and not a loan
- The seller owns the vehicle before selling it and has borne the risks of ownership. Nothing is sold that the seller does not own.
- The buyer receives an asset, not an advance of money.
- The profit is a fixed markup on a real asset, agreed once, not a return on money over time.
- The price is fixed at signing and cannot increase for any reason, including delay. There is no rate and nothing accrues.
- Ownership passes to the buyer at the outset. The seller retains only a security interest, not the asset.
3. Specific practices adopted
| Issue | Approach taken |
|---|---|
| Interest | None charged in any form. The seller’s return is the disclosed markup only. |
| Price increase for delay | Prohibited absolutely, including on rescheduling for hardship. |
| Late payment charge | Paid to a nominated charity. The seller retains none of it. |
| Actual costs of delay | The seller may recover documented out-of-pocket costs with receipts, as reimbursement of loss, not profit. |
| Early settlement rebate | Permitted but discretionary. It is deliberately not stipulated in the contract, as a binding promise of rebate is not accepted. |
| Rescheduling fee | Prohibited. Extending time for money is the thing being avoided. |
| Deficiency after repossession | The seller waives the unearned portion of the markup before claiming any shortfall. |
| Voluntary return | Reconciled as a sale unwind with a full accounting, never as forfeiture of payments as though they were rent. |
| Cost disclosure | Mandatory in Murabaha. Where cost cannot be established, the transaction must be labelled Musawama and the buyer told. |
| Arrangement or origination fee | None charged on the financing. |
4. Disclosure of a rate-equivalent figure
United States consumer credit rules may require an equivalent annual percentage rate to be shown where a total price exceeds a cash price. Where that figure appears in Bysmillah documents, it is a regulatory comparison calculated after the fact. It is not a rate charged to the buyer, nothing accrues at that rate, and the buyer’s obligation does not change with the passage of time.
5. What is not offered at this stage
- Ijara and Ijara Muntahia Bittamleek (lease and lease-to-own) are not offered. They require a party to remain owner throughout the term and carry separate licensing consequences. They are intended for a later phase with a licensed lessor partner.
- No transaction is structured as a sale in name while functioning as a lease in substance. Any arrangement in which the buyer is expected to return the vehicle and forfeit payments is not permitted on the platform.
- Bysmillah does not buy, sell, or discount the receivable created by a transaction.
6. Limits of this notice
Bysmillah does not certify any transaction as religiously valid. At the date of this notice the documents have not been reviewed or approved by a Shariah supervisory board, and no scholar has issued an opinion on them. The structure is drafted with reference to recognised standards, principally the AAOIFI Shariah Standard on Murabaha, but reference is not certification.
Users who require assurance should consult a qualified scholar of their own choosing. Bysmillah will publish the identity of its Shariah reviewer and any opinion obtained once that review is complete, and will update these documents to reflect it.