Murābahah – A Typical Commercial Transaction of Islamic Commercial Law and its Possible Role in the Development of Local Agricultural Farming Newly Islamic Law Based Model

Abstract

Being a comprehensive code of life, Sharī‘ah (Islamic Law) offers a comprehensive mechanism for the solution of every aspect of life. Among these aspects, local agricultural sector as one of the important one. Farmers related to such sector are, generally, from the lower class of the society and, therefore, do not have the financial abilities to fulfill their day to day needs. The option available to them is either to borrow money from relatives/ friends or resort to conventional banks for interest based loans. The previous option is some time not available while the second option is not in line with the principles of Islamic commercial law. In such a situation, the Islamic banks provide, as an alternative, a typical transaction of Islamic commercial law i.e.  Murābahah (cost plus profit based sale.). By using this, various agricultural needs of such local farmers can be fulfilled. These needs included, predominantly, threshers, power tillers, power & boom sprayers, ploughs, cultivators, riggers, drills, draggers, cotton pickers, saw machines for crate making and etc. Finding show that majority of farmers consider this transaction of Islamic law as a viable solution for their problems.  A focused group technique, one of the important techniques of qualitative research, has been adopted in the present work to investigate the issue appropriately.