What is Murabaha? Definition, Legal Basis, Pillars and Conditions, Types, and Their Advantages

You can carry out various sharia transactions, for example murabaha. From the outside, Murabaha looks like an ordinary loan transaction. However, the fact is that the Murabaha contract system is far more open and beneficial to both parties.

In this discussion, DailySocial.id discusses murabaha further.

What is Murabaha?

According to Bariyah (2013), murabaha comes from the words al-ribh and al-ribah which mean happiness or profit. At the same time, Murabahah in terms is an activity of buying and selling goods using an exchange accompanied by predetermined additional benefits.

Murabahah is a type of sale and purchase that is allowed. In a murabaha transaction, the trader must state the price of the goods and the margin or profit. Buying and selling without mentioning the base price and margin is called buying and selling musawamah, and buying goods that are still in order is called buying and selling salami, and both transactions are still allowed. However, this article will focus on the discussion of buying and selling murabaha. Basically, the characteristics of a murabaha business are the purchase of finished products/production equipment/short-term assets.

In this case the cost price and the excess or profit specified in the murabaha contract must be known by the seller and the buyer and based on the agreement of both. The seller also has no right to hide matters relating to price, identity and product quality.

Legal Basis of Muharabah

The legal basis of Murabahah is sourced from the Al-Quran and the agreement of the scholars. Based on the Fatwa of the National Sharia Council No. 04/DSN-MUI/2000 concerning Murabahah, the sale of goods which emphasizes the purchase price above the buyer and the buyer is ready, as an advantage for the seller with a higher price to buy.

The agreement of these scholars follows the rules mentioned in the Qur'an. The legal basis of Murabahah is the Qur'an Surah An-Nisa Verse 29, Al-Baqarah Verse 275, Al-Ma'idah Verse 1 and Al-Baqarah Verse 280.

Pillars and Terms of Muharabah Transactions

Furthermore, in a Murabahah transaction there are pillars that must be met, namely:

• Contracted parties (Al-aqidain)

• Seller/Bank (Bai')

• Buyer/Customer (Musytari)

• The object being contracted (Mahallul 'Aqad)

• There is a form of goods being traded (Mabi')

• Price of goods (Tsaman)

• Akad (Sighat al-Aqad)

• Surrender (Ijab)

• Accept (Qabul)

Meanwhile, among the conditions for a Murabaha transaction that must be met are:

• The seller must inform the buyer of the price of the goods

• Profits earned and agreed must be known with certainty

• Items being sold must be clearly identified.

• Free from elements of Riba

Types of Muharabah

There are two types of murabaha, namely murabaha with orders and without orders. An explanation of the types of Murabahah is as follows.

• Murabahah Made To Order

The first type of murabaha is murabaha by order. Murabahah transactions with orders are carried out after the product ordered by the buyer reaches the seller. So, the Murabahah contract system stipulates that the buyer orders goods in advance. The seller then produces or buys from the supplier then sells it to the buyer with price transparency.

• Murabaha Without Order

The next type of murabaha is murabaha without orders. This type of contract is a murabahah transaction that is carried out directly without waiting for the goods to be ordered because the goods are already available.

Advantages of Muharabah Contracts

Murabaha transactions have several advantages. The benefits of Murabaha are listed below.

• More transparent Murabaha transactions

First, the advantage of a Murabaha contract is that the transaction is more transparent. Because the murabaha contract system means that the seller must inform the buyer about the price of production or purchase of the product and agree on the profit received by the seller. Therefore, transactions must be carried out reliably and honestly.

• Prioritizing the Interests of Both Parties

Second, the advantage of a Murabaha contract is that it prioritizes the interests of both parties. Both parties benefit equally from this agreement. Because the determination of the seller's profit has been agreed between the seller and the buyer. So that both parties can measure the profit of the seller and the right price for the buyer.

• No Interest When You Use the Refund System

Third, the advantage of a Murabaha contract is that it uses a reward system, not interest. Murabahah financing is often used in sharia credit where the bank buys the goods the buyer wants and then sells them at a higher price than the profit according to the agreement with the buyer.

• Negotiable Profits

In addition, the advantage of murabaha is that the advantage of the transaction is negotiable. If the buyer objects to the selling price of the product, this can be negotiated with the seller.

Vice versa, if the seller is not satisfied with the level of profit offered by the buyer, they can discuss the price among themselves.

• Payment in installments is based on an agreement

Furthermore, the advantage of a Murabahah contract is that the installments are paid according to the contract. Murabahah contracts not only regulate transparency, rates are also negotiated according to the contract. Buyers can negotiate the nominal amount and repayment period with the seller.

• Can be used for consumption and production activities

Finally, the advantage of murabaha is that it can be used both for consumption and productive activities. Murabahah financing is mainly carried out by Islamic financial institutions to help customers finance consumption activities such as buying houses and productive activities such as business development.

So, that's a summary of murabahah from the understanding to the benefits that can be obtained from this syar'i transaction.