Australasian Journal of Islamic Finance and Business
Volume 1 ● Issue 1 ● October 2015
www.acrd.net.au/ajifb
AJ
IFB
Theoretical Overview Murabahah Financing in Islamic Banking
Sri Herianingrum and Tika Widiastuti
FEB Univeristas Airlangga, Indonesia
Abstract
This paper aims to determine the application of theories about murabahah financing; how
murabahah financing it should be done by Islamic banks in Indonesia according to the prevailing
Fatwa DSN no. 84. Methods of this study used a qualitative approach with methods of literary
study. The information extracted is literature on murabaha contract, which focus on the
murabaha contract, transaction flow and murabaha margin method. The results of the literature
study showed that the process of murabaha financing in Islamic banks must comply with the
provisions of the fatwa. The provisions about the murabaha contract among others on the selling
price to the buyer, then the flow of murabaha transactions which in practice often cannot be
applied in accordance with the provisions of the fatwa. The method of recognizing gains or
margin in murabaha contract using the annuity method so that the implementation of the
application of the Sharia bank financing in accordance with the DSN fatwa no. 84.
Keywords: Murabahah Financing, Transactions groove, Margin Determination Method
1. Introduction
Advantage and the selling price is murabaha receivables should paid by the buyer to it
sold consisting of principal (ceiling) and the margin (profit), and in accordance with the first
decision point no general provision that 5 Selling Price (tsaman) is the base price plus profit
The flow of financing was first notify customers needs in the desired item, then the bank as a
seller to transfer the money to the account of customers in accordance with the agreed sale price
to the customers as the buyer to provide a representative / power is the base price plus profit
The flow of financing was first notify customers needs in the desired item, then the bank as a
seller to transfer the money to the account of customers in accordance with the agreed sale price
to the customer as a buyer.
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Composition of Commercial Banks Financing Delivered Sharia
Business Unit and Sharia In Indonesia, 2007 - 2011
(Millar Rupiah)
Akad
2007
2008
2009
2010
2011
Akad Mudharabah
5,578
6,205
6,597
8,631
10,229
Akad Musyarakah
4,406
7,411
10,412
14,624
18,690
Akad Murabahah
16,553
22,486
26,321
37,508
56,385
0
0
0
0
0
Akad Istishna
351
369
423
347
326
Akad ijarah
516
765
1,305
2,341
3,839
Akad Qardh
540
959
1,829
4,731
12,937
0
0
0
0
0
27,944
38,195
46,886
68,181
Akad Salam
Lainnya
Total
102,665
Source: BI, Statistik Perbankan Syariah 2012
Banking activities in the real sector, among others, is to channel financing to the business
sector. In terms of financing, Islamic banks differ from conventional banks; Islamic banks are
more oriented to the real sector compared to conventional banks. Activity distribution of funding
will increase the venture capital sector. Capital issues in the perspective of Islamic economics
are very important. Associated with capital, Afzalur Rahman (1997: 263) explains, the capital is
the wealth that helped generate further wealth, covering everything that provide personal
satisfaction, but which also helps generate more wealth. Capital is the wealth of the results
obtained with its own then used to produce more wealth. Capital is part of the production factors
that produce wealth. Without capital, large-scale production in the modern industrial world
becomes impossible, because it is not wrong to say that the industrial progress we have achieved
in this century due to the use of capital.
In terms of financing, Islamic banks differ from conventional banks; Islamic banks are
more oriented to the real sector compared to conventional banks. Activity distribution of funding
will increase the venture capital sector. Capital issues in the perspective of Islamic economics
are very important. Associated with capital, Afzalurrahman (1997: 263) explains, the capital is
the wealth that helped generate further wealth, covering everything that provide personal
satisfaction, but which also helps generate more wealth. Capital is the wealth of the results
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obtained with its own then used to produce more wealth. Capital is part of the production factors
that produce wealth. Without capital, large-scale production in the modern industrial world
becomes impossible, because it is not wrong to say that the industrial progress we have achieved
in this century due to the use of capital.
Four factors causing low for results-based financing, among others, is a relatively highrisk investment because of the difficulty of monitoring the investment activities, principal-agent
problem or mudharib not always act in accordance with the interests shahibul maal, the
competence of human resources in Islamic banking is still low for investment pattern for results,
and the unavailability of in-depth business performance information for each business sector
investment target. This is not a core issue of the magnitude of murabaha financing, as murabaha
relatively easier and less risky than the profit and Musharaka financing. Similarly paradigm
happens to people who are still patterned as well as conventional banks in extending credit
financing. People are still not familiar with the pattern of results in Islamic banks. In murabaha
financing Islamic banks should be able to explain how Islamic banks actually in taking the profit
margin on murabaha transaction.
2. Research Gap
Application of profit recognition method on murabaha financing in Islamic banks before
issuing a Fatwa DSN still using the application less flat generate profit in Islamic banks in terms
of sharia although this method is more devout. Prior to the enactment of DSN fatwa No. 84, the
application of murabaha financing consisting of murabaha contract, the flow of financing
transactions, as well as gain recognition methods is not ideal reference. After the DSN fatwa No.
84 which states that the DSN-MUI decided advantage recognition method, the Islamic banks
using the annuity method gives more impact on the profits of Islamic banks.
Recognition of murabaha financing gain applied by the Islamic Bank and Islamic Bank
(LKS) in general are two methods, namely the proportional method and annuity method. The
application of one of the two methods of recognition of the murabaha financing advantages
cause problems for the industry and society Islamic banks, thus requiring clarity of sharia
aspects regarding the recognition of the advantages of both methods murabaha financing is that
Islamic banks need murabaha financing profit recognition method which can encourage the
growth of Islamic Bank or islamic banks are healthy. Formulation of the problem this paper is
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how should the application of murabaha financing committed by Islamic banks in Indonesia
according to the prevailing Fatwa DSN No. 84.
3. Research Methodologies
To answer formulation of problems is used approach literature study. In this methodology
can be done exploration freely so that had been found deep description, holistic understanding,
and to be able to understand the meaning. Qualitative approach was chosen because this paper
want to explain based on the theory or concept.
4. Results and Discussion
4.1 Murabahah Financing
Murabahah is financing based of sale where the price was already known by both parties
that the seller and buyer, but it is also in murabaha financing is the sale and purchase agreement
and not as conventional bank loans on the assumption that as long as it appears in public,
because here the bank cannot change again the selling price has been set, the Islamic banks do
not change anything even if interest rates are set in the BI rate changed, so no gharar here.
The technical aspects of murabaha financing, among others:
1) Implementation
- Items may be purchased: Purchasing house / building, vehicle, transport equipment,
tools / industrial machinery and other assets that do not conflict with the provisions of the
bank (halal)
- Conditions Bank: murabaha may by order or no order, if the order will be binding and
the buyer can not cancel the order.
- Murabaha principle: the principle of financing based on a sale of the bank acts as a
provider of goods, but in certain circumstances the bank may represent (wakalah)
purchase of goods to the customer.
4.2 Groove Murabaha Transaction
Murabaha financing agreement is a financing agreement as a framework of procedures
that are interconnected and arranged to flow thorough the implementation of the financing
activities. To obtain a murabaha financing, the prospective customer has to go through the stages
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of the procedure for the provision of banks that begins with the filing of financing proposals,
negotiate over the goods in accordance with customer orders so the bank until the end of the
process to obtain financing approval and conduct a transaction agreement in which the bank then
provide financing ceiling and authorize the customer to purchase the product.
Process flow mechanism murabaha financing transactions in Islamic banks in Indonesia
are as follows:
a)
The main Progress Marketing begins serving customers apply for funding
applications and collect documents, the requirements of customer data. The data that
need to be prepared, among others Evidence / business transaction records are only
required if necessary by Committee members or Financing Risk Officer to support
the analysis process.
b)
License does not apply to companies that are exempt in accordance with the Decree
of the Minister of Trade applicable.
c)
Personal NPWP just to petition financing above Rp50 million (unless otherwise
specified in writing by Office local Bank Indonesia). For prospective customers who
do not have personal NPWP must submit the following documents: Copy of NPWP
Company, and letter stating that he or she is handed a personal NPWP if a time
requested by the Bank. If the financing of over USD 100 million are required to
submit a NPWP.
Once all the data is complete and then do Anyur. Anyur is related legal juridical analysis
customers. For example, there is a customer will perform home financing, and then the customer
will see whether previously had financing or a loan at another bank. Can also be analyzed from a
company owned by the customer. Viewed customer data such as the life time of the company,
how the debts and so on. More short examination of the legality of customers to the Unit
Support. Financing to obtain legal opinion for customers who require legal analysis.
Furthermore Examination Financing Condition Prospective Customers through Financing
Support Unit which aims to:
(i)
Checking prospective customers and prospective customers spouses (for joint income)
through the Customer Information System of Bank Indonesia (BI) does not include a
list of problematic financing issued by Bank Indonesia,
(ii) Check that the prospective customer, the husband or wife of potential Customers (for
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joint income), as well as the company a borrower (for self-employed).
4.3 Recognition Method Margin Murabaha
In setting the margin murabaha Islamic Bank Muamalat and generally the Bank using the
annuity method stated at cost / selling price consisting of principal and margins. This method
differs from the method of flats, annuity method is a method that is recognized proportionately
over the instalment system is at the beginning of the principal portion is small, and a large
portion of the margin, so it will not make banks suffered losses due to the beginning of the actual
instalment of the bank has received a portion of the margin large, so if the customer at a time
experienced accelerated repayment or stalled in the financing, the bank is no longer bear the loss
on income from murabaha financing, because the contract is happening here is selling.
Application of the method gains on murabaha financing in Islamic banks in general using
the annuity method, which is done in proportion to the amount of goods that have not been billed
by multiplying percentage price advantage against the rest of the amount of principal that has not
been billed. Based on the description of the main focus on the object of this study consists of
three indicators are taken from the DSN.
On the sale of murabaha financing price agreed as murabaha receivables are comprised of
the principal portion and margins previously been known by the seller and the buyer before
agreement.
2. Transaction Grove
Before getting financing, there are several grooves that must be passed in Murabaha
financing transactions. Islamic banks not as a merchant, but more as a service for the murabaha
financing, Islamic banks do not provide essential goods to the buyer (customer) but represents /
provide power to customers to purchase items needed, as of yet incompatibility of murabaha
transaction flow with the provisions of fatwa, and the applicable rules of Islamic jurisprudence is
that this line of business in Indonesia still be limited. Islamic banks in Indonesia are still not
allowed to have their own businesses, such as retail showroom or who can provide the goods to
the customer. If the item is a moving object, then the bank must provide the storage and it will
also be difficult for the bank. Therefore to anticipating difficulties faced by the bank, then in
banking practices, murabaha transaction described as follows:
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1.
Negotiations deal
2.
Sale and Purchase Agreement (Wakalah *)
3.
Send the Customer acting for and on behalf of the bank as a representative (wakalah)
based on the power of the banks to customers to buy goods directly to suppliers with
specifications agreed between the customer and the supplier.
2.
Customer acting for and on behalf of the bank as a representative (wakalah) based on
the power of banks to customers to make payments to suppliers.
3.
Supplier acting for and on behalf of the bank based on the power of the bank to the
supplier to make delivery of the goods directly to the customer. The mechanism of the
above transaction flow is called murabaha financing instruments have been
incorporated into the so-called contract. Contracts or contract used by the bank to
process murabaha financing which banks as sellers make buying and selling to
customers as a buyer with a sale value of the cost of goods that are added to the margin
has been agreed upon by both parties
3. Method of determination of the flow
The number of public criticism of profit recognition method that has performed by
Islamic Bank today is not much different with conventional banks raises questions so look for
differences in the annuity method in conventional banks with Islamic banks, It should be noted
in this Murabaha financing is
1. Marketing officer is not allowed to give details of the portion of principal information
and margins of each month. Customers are only given information on the total instalments to be
paid every month it is to avoid disagreement in the event of early payment.
2. Redemption in part by the amount of the deposit more than 50% of the total outstanding
balance (principal debt), then after rescheduling the repayment is done by taking into account the
price set in the agreement and the determination of the rest of the agreed period.
3. Repayment in part by the amount of the deposit is less than 50% of the principal amount
of the remaining debt, the amount and the maturity schedule of monthly instalments unchanged.
Murabaha margin determination method is determined by the price of the acquisition of goods,
as a model for determining the selling price determination murabaha financing carried out in
accordance with the concept of murabaha financing from the viewpoint of Islamic economics. At
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the murabaha transaction using the annuity method is determined by the average margin of other
Islamic banks, this shows that this method is still not out of the enactment of the interest rate on
average than conventional banks. Nevertheless, the concept of interest rates on loans that run on
conventional banks based on the payment amount is not applicable to Islamic banks.
Composition margin murabaha murabaha and principal installments different each installment
period (annuity), showed that the murabaha transaction in accordance with the rules of murabaha
transaction in the perspective of Islamic economics, which still wanted to benefit in accordance
with the financing target, but more just and minimize tyranny over the murabaha margin
determination excessive.
Islamic Bank draft murabaah financing aims to create pricing policy on murabaha are
expected to compete with the bank's credit score konvnsional, this is done not to give murabaha
margin based on interest rates, but until this center of Islamic banking in particular have started
set margin murabaha corresponding with applicable regulations.
3.4 Analysis of Implementation based DSN No. 84 / DSN-MUI-XII / 2012
Application of murabaha financing basically there at DSN fatwa No.04 / DSN MUI /
IV / 2000, but enhanced and decided again by the National Islamic Council of Indonesian Ulama
Council on the method used in the determination of margin murabaha contract that is no longer
being debated in the world banking community, thus requiring clarity of sharia aspects of the
method used. On the basis of these considerations Indonesian ulama council set a new fatwa no.
84 in 2012.
1.
Murabaha according to informants of Bank Muamalat is the sale and purchase
agreement that the price has been known by the seller and the buyer before the contract
agreement, so the statement is in accordance with the provisions of the General
provisions point no 3 which states that the Murabaha is a sale and purchase agreement
to affirm the purchase price to the buyer and the buyer paid the price more as an
advantage. And the selling price is murabaha receivables should paid by the buyer to it
sold consisting of principal (ceiling) and the margin (profit), and in accordance with the
first decision point no general provision that 5 Selling Price (Tasman) is the base price
plus profit
2.
The flow of financing was first notify customers needs in the desired item, then the
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bank as a seller to transfer the money to the account of customers in accordance with
the agreed sale price to the customers as the buyer to provide a representative / power is
the base price plus profit
3.
The flow of financing was first notify customers needs in the desired item, then the
bank as a seller to transfer the money to the account of customers in accordance with
the agreed sale price to the customers as the buyer to provide a representative / power to
customers as the buyer to provide a representative / power to customers to buy items
required by the observation of the Bank. So Bank here not buy goods, but rather
authorize / delegate to the customer to buy it, so it is still not in accordance with the
general provisions of the fatwa first decision point no 4 which states that the At-Tanwil
bi al-Murabaha (Murabaha financing is murabaha in Islamic banks (LKS) with LKS
way to buy goods in accordance with customer orders, and then sell it to the customer
LKS (after the goods become the property of LKS) with payment by installments.
4.
The method of recognizing gains in Bank Muamalat using Annuity method, so that it is
in accordance with the special provisions no.4 third verdict stating that the method of
recognizing gains at- tanwil bi al-Murabaha which ashlah in its infancy LKS is a
method Annuity.
5.
Annuity method is a method used in murabaha financing its capital, cost of goods
(ceiling) multiplied by the margin (profit) is the price that is charged in proportion to
the provisions of the principal portion of a large conical bottom, and a small portion
conical bottom margin, so that the statement in accordance with the general provisions
first decision No. 3: Annuity Method (Thoriqoh al reckoning al-Tanazzuliyyah /
Thariqah al-Tanaqusiyyah) is the recognition of profits proportionally on the remaining
amount of goods that have not been billed by multiplying the percentage of profit to the
cost of the remaining amount unbilled (al-atsman al-mutabaqqiyah). Furthermore, Bank
Muamalat journal earned income from murabaha financing as murabaha receivables,
with a recorded portion of principal and ma in the repayment schedule, further margin
recorded by the bank may not be recognized as income murabaha, before financing is
completed, so that the statement in accordance with the Decision of the third Special
Provision No. 5, namely in terms of worksheets using attamwil profit recognition
method bi al-murabaha is an annuity, the portion of profits to be there during the
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installment period profit at-tamwil bi al-murabaha may not fully recognized before
murabaha financing ends / paid in full so that conclusions can be drawn regarding the
implementation of murabaha financing in islamic banks in Indonesia is in accordance
with the DSN fatwa No. 84 / DSN / MUI / XII / 2012 as the true Islamic banks in
general, are very attentive to the benefit of society in this regard.
5 Conclusions and Implication
5.1 Conclusion
Conclusions that can be drawn from this paper are:
1. Murabaha is a sale and purchase agreement which the selling price has been known by the
seller and the buyer before the contract agreement.
2. Chronology of Islamic bank financing is initially notify the customer needs the desired
item, then the bank as a seller to transfer the money to the accounts of customers in
accordance with the agreed sale price to the customers as the buyer to provide a
representative or authorized to customers to purchase items needed by the observation of
the Bank. So Bank here not buy goods, but rather authorize or delegate to the customer to
buy it, so in that case is still not in accordance with the DSN fatwa No. 84.
3. The method of recognizing gains on Islamic banks use Annuity method, so it is in line
with the DSN DSN fatwa No. 84 the which states that the method of recognizing gains attamwil bi Al-Murabahah ashlah that in the future growth of Islamic banks is the annuity
method.
5.2 Implication
The implication of this paper is:
1.
Islamic banking needs to improve its compliance with the provisions contained in the
DSN fatwa to become Islamic financial institutions capable of channelling funds under
the terms of sharia, and with the benefit of the world and the hereafter
2.
The need for improvement in the implementation of murabaha financing transaction flow
is applied through a representative (wakalah) as they exist in the provisions of the DSN
No. 84; so as to lift the Islamic banking institutions become more convincing customers.
3. The concept of Determining the margin in terms of Determining the selling price in
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murabaha financing is expected to reflect the value of Shariah in Islamic Banking as
changing the margin calculation results are listed in murabaha financing contracts
Expressed in nominal terms, not the form of percentages, Because The presence of
Islamic banks in our Midst is expected to solve all the economic problems of Sharia.
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