This video explains the concept of a forward sales contract (Salam) in Islamic finance as a fair and interest-free financing solution, where the buyer pays the full price upfront for goods that will be delivered in the future (“pay now, receive later”). Through an example of a farmer and a company, it shows how the contract creates a win-win situation: producers gain immediate capital while buyers secure stable prices. The video also highlights its economic benefits, such as reducing uncertainty and supporting growth, as well as its social impact, including promoting fairness and providing access to capital without riba. To be valid, the contract must meet key Sharia conditions, such as clear product specifications, full upfront payment, a fixed delivery date, and ethical terms. Salam is commonly used in agriculture, industry, and small businesses, but not for monetary items like gold or currencies, making it an important tool for building a stable, just, and inclusive economic system.
Salam (Forward Sale)
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Ba’i al-Muajjil (credit sales)
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Istisna (Manufacturing)
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Ijarah (Leasing)
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Murabaha (Cost-Plus Financing)
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Musharakah (Joint Venture)
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Mudharaba (Profit-Sharing)
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Rahn (Pledge)
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Kafalah (Guarantee)
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Hawalah (Debt transfer)
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About Lesson
