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8 min de lecture

Murabaha: Cost-Plus Financing Explained

Murabaha is the most common NIB product in Ghana. Learn how it works, how it differs from a loan, and when businesses use it.

Murabaha is a cost-plus financing arrangement and the most widely used Non-Interest Banking product in Ghana. Understanding it is essential for any business considering NIB finance.

How Murabaha Works

1. Client identifies an asset — A business needs a piece of equipment worth GHS 50,000

2. Bank purchases the asset — The NIB bank buys the equipment directly from the supplier

3. Bank sells to client — The bank sells the equipment to the client at GHS 58,000 (cost + 16% profit margin)

4. Client pays in installments — The client pays GHS 58,000 over 24 months

Murabaha vs. A Conventional Loan

FeatureMurabahaConventional Loan

|---------|----------|------------------|

BasisTrade transactionMoney lending
Bank's returnProfit from tradeInterest on money
Asset ownershipBank owns asset firstNo asset required
Price changePrice fixed at contractRate can vary
Shariah complianceYesNo

Key Conditions for Valid Murabaha

  • The bank must genuinely purchase and own the asset before selling it
  • The profit margin must be disclosed upfront — no hidden fees
  • The total price must be agreed at the outset and not increase
  • The asset must be a real, tangible item (not just cash)

    • Common Uses in Ghana

  • Importing goods and raw materials for SMEs
  • Equipment and machinery financing
  • Vehicle financing
  • Consumer goods (electronics, furniture)
  • Agricultural inputs

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