Murabaha vs Traditional Riba Based Finance
- Asset-linked vs cash lending: Murabaha is tied to real assets or capacity; riba based finance lends cash against interest.
- Transparent markup: Profit is disclosed and agreed upfront, instead of compounding interest over time.
- Vendor payment certainty: Funds flow directly to suppliers, ensuring delivery and reducing misuse of proceeds.
- Sharia compliance: Avoids riba and aligns returns with real economic activity.
- Receivable-backed security: Collections are linked to actual customer payments rather than interest schedules.