What is Istisna’?: The Uniqueness Of Istisna’

What is istisna'?
Do you know the uniqueness of Istisna’ in Islamic finance? You may have heard the word “istisna” and you may be wondering what it is. In this article, we will explain what it is. Hopefully, you can use this to your advantage with this knowledge.

Firstly, Istisna is a sale contract between the seller (bank) and the buyer to manufacture or build an asset at a pre-determined future time.

In the case of istisna, the bank sells an asset even before its existence or completion. The buyer can pay the seller (bank) either in different instalments, at the delivery of the asset, or after completion. In Islamic Finance, istisna can be used to finance the construction of the following: houses, roads, projects, plant, and types of machinery.

Furthermore, infrastructure projects are the main examples of istisna’ application. This includes the construction of power plants, factories, roads, schools, hospitals, buildings and residential developments. 

Learn the Islamic way of Investing. Understand important investment terms and fundamental concepts to make better investment decisions. Learn how to invest wisely and not gamble blindly.

At Musaffa our mission is to democratize Islamic Finance education and help Muslim investors around the world pursue their financial goals through our trading and financial education platform.

To read more about Islamic Finance related topics, please click here and visit our academy.

Besides, feel free to sign up for our free stock screening services at musaffa.com.