BlogIslamic finance
Musawamah or Murabaha: what’s the difference?
By the Mobilistan team
, 3 min read
Two Islamic ways of selling on deferred payment. Both are sales, not loans. The difference is one thing: whether the seller tells you its cost.
If you have looked into halal instalments, you have probably seen both words. Banks talk about Murabaha. Our certificate says Musawamah. They are close relatives, and it helps to know how they differ.
What they share
Both are sales. In both, the seller must own the item before selling it, one price is fixed when the sale is made, and that price can’t grow if you pay late. Paying later, in instalments, is allowed in both. None of that is a loan, so none of it is interest.
The one difference
In Murabaha, the seller tells you what it paid for the item and how much profit it is adding. The price is openly “cost plus profit”.
In Musawamah, the seller and buyer simply agree a price. The seller doesn’t have to reveal its cost or its margin. It is how most everyday trade works: you see the price, you agree or you don’t.
Why Mobilistan uses Musawamah
Phones are bought from many partner shops, at prices that change often. Musawamah lets us give you one clear price for the phone on a given plan, without turning every sale into a cost calculation. What matters for you is the same in both: you know the full price, the advance and every instalment before you agree, and it never goes up.
Our Musawamah model was reviewed and certified by Al Hijrah Sharia Advisory Services. You can see each step, and the certificate, on our Sharia page.
Side by side
- Who owns the item before the sale: the seller, in both.
- The price: fixed when the sale is made, in both.
- Paying late: the price cannot grow, in both.
- The seller’s cost: told to the buyer in Murabaha; not required in Musawamah.
Questions people ask
Is Musawamah halal?
Yes, when it is a real sale: the seller owns the item first and one price is fixed. It is an ordinary sale at an agreed price, with the payment made later.
Which is better, Musawamah or Murabaha?
Neither is “more halal”. Both are sales. They differ only in whether the seller tells you its cost.
Does Mobilistan tell me what it paid for the phone?
No, and Musawamah does not require it. You see the full price, the advance and every instalment before you agree, and that price never goes up.
Is Musawamah a loan?
No. Nothing is lent. A phone the seller owns is sold to you, and it is yours from the moment you accept the Sale Agreement.
Who certified Mobilistan’s Musawamah?
Al Hijrah Sharia Advisory Services, whose Sharia board is Maulana Syed Muhibullah Agha, Dr. Kaleem Ullah and Mufti Syed Sanaullah. See is buying a phone on qist halal?
Still stuck? Call us on 0370-8199951.
See how our Musawamah works
