A murabaha transaction between a purchaser and an investment agent (wakil bil istithmar) acting as mudarib or investment agent on behalf of a group of investors with the funds for the purchase of the asset (commodities, durable assets, etc.) being provided by a syndicate of financial institutions. The investment agent holds title to the asset until it is sold to the seeker of funds (borrower). Under shari’a, the seller must be the real owner of the asset before offering it for sale (bai’/ bay’). The investment agent (the lenders) will bear the risk (mukhatarah) of loss during the holding period and their profit (ribh) will be derived from the sale, being the difference between the price (thaman) paid by them to the third-party supplier and the mark-up price paid to them by the borrower to purchase the asset.

Amounts paid by the borrower toward the purchase price of the asset are used to pay the investment agent (fees) and the syndicate banks– including the investment agent, if any- (pro rata share of the amount each contributed).