BLOCKCHAIN-ENHANCED ISLAMIC FACTORING
WHAT IS FACTORING?
Factoring is financial transaction and a type of debtor finance in which a business sells its accounts receivable (i.e., invoices) to a third party (called a factor) at a discount.
A business will sometimes factor its receivable assets to meet its present and immediate cash needs. Factoring is commonly referred to as accounts receivable factoring, invoice factoring, and sometimes accounts receivable financing.
ISLAMIC BUSINESS CONCEPT
| BAI AL MURABAHA |
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Murabaha is a form of sale where the cost of good sold as well as the profit is known to both parties. The purchase and selling price and the profit margin must be clearly stated at the time of the sale agreement. Payment of the Murabaha price may be in spot, in installments or in lump sum after a certain period of time. |
| BAI AL DAYN BI AL SILA’ |
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Bai Al Dayn is essentially a contract of the sale of debt. Being a contract of sale, there must be all the elements or pillars of a sales contract such as legitimacy of contracting parties, and offer and acceptance. Between the contracting parties there must be a subject matter of sale, a price, and delivery of the asset. The asset in the case, however, is a financial asset or a debit. |
| TAWARRUQ |
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Tawarruq is a financial instrument in which a buyer purchase a commodity from a seller on a deferred payment basis, and the buyer sells the same commodity to a third party on a spot payment basis. The buyer basically borrows the cash needed to make the initial purchase. Later, when he secures the cash from the second transaction, the buyer pays the original seller the installment or lump sum payment he owes (which is cost plus markup, or murabaha). |
| TRADITIONAL WORKFLOW |
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WHAT MAKE FACTORING FEASIBLE?
- The Contract Awarder is a Very Good Paymaster
- The Factoring Market Cake is HUGE
- Factoring House exclusive relationship with Vendors
- Secured Payment Arrangement via Assigned Deeds of Agreement (A.D.O.A.) directly from Contract Awarder to Factoring House upon completion of Vendors’ works
WHY BLOCKCHAIN TECHNOLOGY?
- Peer to peer – no middlemen
- Borderless – online
- Faster – within minutes
- Cheaper – very low fee
- Secured and unhackable
- Transparent
| HOW TECHNOLOGY MAKES IT BETTER? |
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WHY PAY WITH TETHER (USDT)?
Get the joint benefits of open blockchain technology and traditional currency
Tether converts cash into digital currency, to anchor or tether the value to the price of national currencies like the US dollar, the Euro, and the Yen.
Every tether is always 100% backed by fiat reserves, which include traditional currency and cash equivalents and, from time to time, may include other assets and receivables from loans made by Tether to third parties, which may include affiliated entities (collectively, “reserves”). Every tether is also 1-to-1 pegged to the dollar, so 1 USD₮ is always valued by Tether at 1 USD.
The value of our reserves is published daily. The value of our reserves matches or exceeds the value of all tethers in circulation.
The Tether platform is built on top of open blockchain technologies, leveraging the security and transparency that they provide.
Tether is the most widely integrated digital-to- fiat currency today. Buy, sell, and use tethers at Bitfinex, Shapeshift, GoCoin, and other exchanges.
Tether’s blockchain enabled technology delivers world-class security while meeting international compliance standards and regulations.
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