Structured, Shariah-compliant infrastructure that re-engineers conventional receivable-based exposures into permissible, asset-based and service-based arrangements, preserving commercial objectives while maintaining full Shariah integrity.
Factoring and supply-chain finance are among the most commercially significant financial instruments in global trade, yet their conventional structures are fundamentally incompatible with Shariah principles, primarily because they involve the direct sale of debt at a discount, which is prohibited under Islamic law.
SĀBIQ CONDUIT provides the Shariah infrastructure to change this. Rather than simply applying a Shariah overlay to a conventional model, CONDUIT re-engineers the underlying transaction structure, replacing debt-trading mechanisms with permissible, asset-based or service-based arrangements that achieve the same commercial outcomes through Shariah-compliant means.
Every transfer executed through CONDUIT is structured through recognised and approved Shariah contracts, ensuring that commercial objectives are met without compromise to Shariah integrity. Our senior advisory team brings direct multilateral experience advising on Islamic supply chain and SME finance models for global institutions.
CONDUIT enables institutions to offer a full suite of Islamic supply-chain and trade finance solutions, each structured through approved Shariah contracts and aligned with recognised standards.
Shariah-compliant structures for financing receivables — replacing conventional invoice discounting with asset-based arrangements that transfer genuine economic ownership and service-delivery rights, in strict compliance with Islamic law.
Structured Shariah-compliant solutions for buyers seeking to extend payment terms while enabling suppliers to access early settlement — engineered through permissible Shariah contracts that preserve the commercial dynamics of conventional payables finance.
Supply-chain finance structures built around the Wakala (agency) framework, enabling institutions to facilitate trade flows and working capital solutions for their clients through Shariah-aligned agency arrangements.
End-to-end Murabaha-based trade finance structures for import and export financing, letter of credit alternatives and trade working capital, providing Shariah-compliant access to the full range of trade finance instruments.
Invoice financing solutions structured through permissible Shariah contracts, enabling businesses to unlock liquidity from outstanding invoices without recourse to interest-based facilities or prohibited debt-sale mechanisms.
Shariah-compliant working capital and inventory financing solutions for SMEs, designed to enable access to Islamic finance for smaller businesses across the supply chain, informed by direct advisory experience with multilateral institutions.
Every CONDUIT structure is anchored to recognised Shariah principles and approved contracts, ensuring commercial objectives are met without crossing prohibited boundaries.
SĀBIQ CONDUIT serves financial institutions and corporates seeking to offer or access Shariah-compliant alternatives to conventional supply-chain and trade finance products.
Why is conventional factoring prohibited under Shariah?
Conventional factoring involves the purchase of a debt (an invoice or receivable) at a discount, which constitutes bay' al-dayn: the sale of debt at below its face value. This is prohibited under the majority scholarly position in Islamic finance because it involves trading in debt as a commodity, which is considered a form of Riba (interest). CONDUIT resolves this by replacing the debt-trading mechanism with asset-based or service-based Shariah contracts that achieve the same commercial outcome.
What Shariah contracts does CONDUIT use instead of conventional structures?
CONDUIT structures are built around recognised and approved Shariah contracts including Murabaha (cost-plus sale) and Wakala (agency), and combinations thereof. These contracts replace debt-trading mechanisms with genuine transfers of economic ownership, service-delivery rights or agency arrangements, ensuring that every value transfer is underpinned by a permissible Shariah basis.
Can CONDUIT structures preserve the same commercial economics as conventional SCF?
Yes. A core principle of CONDUIT's design is the preservation of commercial intent. Buyers and suppliers retain the same functional outcomes: extended payment terms, early settlement access and working capital solutions. The underlying contracts are re-engineered to achieve these outcomes through Shariah-compliant means, without compromising commercial viability or requiring participants to accept materially different economic terms.
What is the difference between Islamic receivables financing and conventional invoice discounting?
In conventional invoice discounting, the invoice (a debt) is sold at a discount. In Islamic receivables financing, the structure is re-engineered so that what is transferred is not the debt itself, but the underlying asset ownership or service-delivery right. This means the financier acquires a genuine economic interest in the asset or service, not merely a discounted claim on a debt, which is the key distinction that makes the structure Shariah-compliant.
Can CONDUIT support SME finance programmes?
Yes. CONDUIT includes Shariah-compliant working capital and inventory financing solutions specifically designed for SMEs across the supply chain. Our team has direct advisory experience with multilateral institutions on Islamic SME and supply chain finance models, and CONDUIT's structures can be adapted for deployment through banks, development finance institutions and multilateral programmes targeting SME access to Islamic finance.
Talk to our team about how SĀBIQ CONDUIT can be structured for your institution.
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