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Tradable Inventory Certificates A Proposed New Liquidity Instrument

Author

Listed:
  • KAHF, MONZER

    (Professor of Islamic finance at Qatar Faculty of Islamic Studies, Doha, Qatar)

  • KHAN, MAHAH MUJEEB

    (MSc. Islamic Finance graduate of Qatar Faculty of Islamic Studies, Doha, Qata)

Abstract

The paper proposes inventory certificates, a new Islamic financial instrument based on inventory of big corporations to be financed and owned by investors. This instrument uses murābaḥah as the underlying contract and accommodates collateral and guaranteed return. It may be issued for short to medium terms. It has a potential important contribution to solving the problems of working capital finance faced by Islamic business institutions in general and liquidity management of Islamic banks in particular. It will also address the dearth of short term investment tools in the Islamic financial markets, providing an instrument which characterized of having stable and low risk returns.

Suggested Citation

  • Kahf, Monzer & Khan, Mahah Mujeeb, 2015. "Tradable Inventory Certificates A Proposed New Liquidity Instrument," Islamic Economic Studies, The Islamic Research and Training Institute (IRTI), vol. 23, pages 1-31.
    • Handle: RePEc:ris:isecst:0144
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