Aplikasi dana dalam sistim keuangan syariah

  Application of Fund in Islamic Financial System

     In the area of application of fund, interest-free banking system has relied heavily on two instruments of financing which are murabahah and bay' bithaman ajil. As far as murabahah (cost-plus-sale) is concerned, interest-free banking system has considered it as a short term financing mainly used for working capital financing and Letter of Credit for trade financing. Under this facility, the customer may approach the bank to provide financing for his working capital requirements to purchase stock and inventories, spares and replacements, or semi-finished goods and raw materials. The bank will subsequently sell the goods to the customer at all agreed price comprising its purchase price and a profit margin, and allow the customer to settle this sale price on a deferred term of 30 days, 60 days, 90 days or any other period as the case may be. Murabahah as applied under interest-free banking is not only a financing facility granted for a short period of time but also a deferred payment sale which must be settled in lump sum because it is stated that on due date, the customer pays the bank the agreed sale price.

As far as bay' bi thaman ajil (BBA) is concerned, this facility is used particularly in Malaysia for financing the acquisition of assets and the payment usually is based on instalment basis payable in longer period compared to murabahah facility repayment. The contract of BBA has been utilized by the bank to provide the customers medium and long term financing to acquire items which may include landed property, houses, motor vehicles, furnitures, stock and shares, etc. However, comparatively speaking, house financing is the most popular facility granted under BBA either to purchase a new house; or to purchase existing completed houses; or to build a house on customer's land; or as a refinancing facility. In addition to murabahah and BBA, the Islamic bank also offers ijarah or lease financing. It generally involves the purchase by the bank of a specific asset and its lease to the customer for a long or intermediate plan whereby the bank charges an agreed charge or rent.

One may question how Islamic financial system could be able to offer alternatives to the conventional interest-based loans such as housing loan, bridging loan, project financing, revolving credit/overdraft, share financing, infrastructure financing, discounting of commercial papers, etc. The following is a brief but comprehensive illustration of various products which are able to meet the modern needs of finance but at the same time are compatible with the Shari'ah. We have already dealt with both bay' bi thaman ajil and murabahah which are useful in terms of financing a customer to purchase a commodity be it houses, shop houses, land, motor vehicles, consumer goods, shares, education package and other suitable goods. They are also equally useful for refinancing purposes. In the area of revolving credit or overdraft, some banks have started introducing Islamic revolving credit and Islamic overdraft on the basis of hiwalah with the combination of ju'alah (contract of commission) or wakalah bi al-ajr (agency with fees) which seems to be a good alternative to revolving credit facility or overdraft offered under conventional banking to finance the working capital requirement of the company including overhead expenses. Overhead or utility expenses may include vis a vis water bill, electric bill, rental bill, phone bill, custom duties, consultancy fees and the like.

In fact, interest-free revolving credit may be made available to a customer provided the facility is supported by one of the following trade transactions namely, imports documents, local purchase documents and overhead bill vis a vis utility bills and the like. This facility, in other words, can only be allowed for purchase of goods like raw materials, semi-finished or finished goods including goods like machinery, parts and utility bill. Interest-free revolving credit can only be given to an amount equal but not exceeding the financial value of the trade transaction as indicated in the supporting documents. However, it is to be noted that the proceeds of these expenses must be paid to the vendor or supplier either through the remitting bank or directly, depending on how the documents was received. Proceeds of this facility should under no circumstances be credited to the customer's account because otherwise it will be against the principle of hiwalah. Utilizing hiwalah for a service charge would, it is respectfully submitted, efficiently replace the conventional overdraft and purchase of Bill of Exchange issued under Documentary Credit or Discounting.

Modern Islamic financial system also witnesses the application of Islamic syndication particularly in major project and infrastructure financings. Syndication in financing takes place when a group of financial institutions agree to advance a portion of the fulfilling for a particular project. This kind of financing becomes more and more popular as the Ministry of Finance has issued a directive that all major Malaysian infrastructure projects have to have an Islamic financing component as in the case of Kuala Lumpur International Airport (KLIA) project at Sepang which has secured a portion of Islamic financing in all its stages of construction. As the project are normally large and require large financing, one bank may not be able to provide sufficient financing. Above all, the Central Bank of Malaysia has prescribed that banks may not provide financing to any single customer in excess of the Single Customer Limit which is defined as 30% of the Bank's capital fund. In cases where the financing required is ill excess of the Single Customer Limit, the bank shall arrange for the balance of the provided by other banks. The arranger, also known as manager, lead manager and co-manager respectively, would be entitled for certain amount of fees on the basis of wakalah (agency ship) for his effort and expenses.

Also relevant is the introduction of Murabahah Notes Issuance Facility (MuNIFs) MuNIFs is the interest-free alternative to the conventional revolving underwriting facility. Under MuNIFs, the components of revolving and underwriting are also present. Being structured under the concept of murabahah or cost-plus, the tenderers bid for the purchase price of the underlying assets. Having purchased the assets they are then sold to the issuers at a mark-up price and on deferred periods ranging from one month to one year. This selling price, which the debt created under these contracts of sale, is evidenced by murabahah notes. The debts created out of the murabahah contracts are then securitized through the issuance of Murabahah Notes. The notes will be traded on the secondary market among designated institutions under the concept of bay' al-dayn (sale of debt). Obviously, the notes issuance could be used, inter alia, for working capital requirements and capital expenditures which are useful for any project financing. In addition to what has been said, the idea of Islamic Private Debt Securities (IPDS) would also be significant in promoting the project financing under interest-free banking operations. A good example of IPDS is the one issued under the contract of al-musharakah which was undetaen for Sarawak Shell Berhad in 1991. This musharakah, which falls under the category of musharakah mutanaqisah (decreasing partnership) is a limited contract of participation in terms of duration. The holders of the securities are paid periodically a certain amount of profits from the production turnover of the oil wells based on an agreed proportion, with added bonuses should the turnover exceeds certain levels. In that scheme, the total amount of the facilities was RM 560 Million (US $ 225 Million).

The issuance of Islamic private debt securities is basically based on the concept of securitization. Securitization refers to the creation of tradable certificates evidencing a debt arising out of financing facilities. In brief, securitization is a process that makes debt tradable on the secondary market. The act of securitization is meant for having liquidity which is known in Islamic law as suyulah. The process of securitization is a form of financing by converting the assets, tangible or otherwise, into cash without increasing the leverage on the balance sheet by selling those assets to a special purpose vehicle (SPV) which in turn issues debt securities to finance the purchase. By so doing, the company would be able to get cash which is needed for its projects. As for the SPV, it needs to securitize the debts purchased to be sold to the investors either on the basis of mark-up sale (murabahah) or profit sharing (mudarabah) by issuing murabahah and mudarabah securities respectively.

In Malaysia, the Islamic view point which is now prevalent is that the company may sell the debts to the spy under the purview of bay' al-dayn (sale of debt). Also, in respect to securitization, the financial guarantee is needed to ensure the commitment of the SPV to pay agreed profit and redemption amount of securities to the investors. Perhaps, the role of the Rating Agency Malaysia Berhad (RAM) would be very much relevant to measure the safety of the Islamic securities. Thereof, it has been suggested that the minimum rating to qualify as an investment grade instrument is triple 'B' ('BBB') whereby anything below triple 'B' will be considered as a speculation grade investment.