AlMusharka: This type of financing is based on the bank’s participation with one or more customers with a specific portion in the capital of a specific project, according to a participatory contract that includes the basis for profit distribution. However, for the loss, it is distributed according to the portion of each of them in the capital.

AlMusharka takes in two ways:

– Fixed Musharka

is based on the fact that the bank and its partners own fixed portions until the end of the project, whether the participation is continuous (indefinite term) or temporary (definite term).

– Declining participation ending in ownership of the customer:

This type of participation is based on the bank’s and its customer (the partner) owning portions (shares) in the project according to the agreement and in accordance with the bank’s contribution to the project, and that the customer pays the bank’s portion gradually from project’s revenue and/or its own sources. With the continuation of paying the bank’s portion, in the end, the ownership of the entire project is transferred to the customer after paying the bank’s portion in full, taking into account that the revenue generated from the project is divided into certain ratios in the order agreed upon:

• A portion for the bank as a return for its funding.

• A portion for the partner as a return on the financing provided by him or in return for his in-kind contribution to the costs of the project, taking into account the possibility of using the entire portion of the customer or any additional part of it to repay part of the financing granted by the bank, which accelerates the customer’s ownership of the bank’s shares earlier.