It is a type of corporate financing that enables multiple uses of a line of credit within the financing term, without having to comply with an agreed upon schedule of payments. Companies with irregular financial needs use Revolving Credit to get the flexibility of financing their projects as needed and when needed.
Tawarruq is the Shariah instrument used in Term Financing facilities. Sales under the Tawarruq arrangement are conducted according to Murabahah, which means that the cost and the profit margin are known and agreed upon in advance by both parties.
Through Wakalah agreement, Customer appoints MBSB Bank as Customer’s sale and purchase agent in all sale transactions of the Tawarruq arrangement.