Istisna’a provides an instrumental tool for financing of all types of assets that are not readily available with the seller at the contract date, but rather require manufacturing or construction over a specific period of time (the term of the contract). The subject matter of this contract is usually a commodity/ object that would be delivered in the future. The seller (al-sani’) undertakes the manufacturing or construction of the subject matter to the benefit and order of the buyer (al-mustasni’) in return for a specific price. That price doesn’t need to be settled in advance, as it can be paid in installments or a lump-sum amount as per agreement of both parties.

At the times of early Islam, people used to resort to istisna’a to fulfill personal, small-scale requirements such as shoemaking, tailoring, pottery and tableware-making, or any article/ object to which there was no readymade equivalent in the market. Nowadays, and following the wide strides made by the Islamic financial industry, banks and other institutions use istisna’a contract and structure in providing finance to a wide range of projects and activities (heavy industries, light industries, construction, infrastructure development, etc). In particular, istisna’a has been used to finance:

• property developers’ requirements (real estate construction) whether on plots of land provided by al-sani’ or al-mustasni’.
•  heavy industries such as the making of ships, trucks and vehicles, trains, planes, equipment, etc.
• infrastructure projects such as road networks, bridges and flyovers, tunnels, seaports or airports, etc, in addition to medium-size industries like extraction, processing, and petrochemicals.
•  canning and food preservation industries.