How Islamic International Factoring works

Islamic international factoring works on the basis of tamleek, exactly like the assignment in usual international factoring, with the only difference of signing the Supplemental Agreement to cover the deviations mentioned earlier. If the export factor is an Islamic one the import factor may sometimes receive an order approval request instead of a credit line depending on which Islamic nancial instrument is used as a basis for factoring.

 

Islamic International Factoring by Islamic Export factor:

An Islamic international factoring transaction with an Islamic export factor and non-Muslim import factor. Whatever the Islamic financial transaction is used as a basis for Islamic factoring, the receivable is assigned to a non-Muslim import factor under the GRIF and Supplemental Agreement for Islamic International Factoring. For the import factor there is no more differences in their action than the deviations listed earlier.
 
Islamic International Factoring with Islamic import factor:

 

The flow of transaction is not different for an Islamic import factor. A conventional export factor assigns their receivable to the Islamic import factor under the GRIF and the Supplemental Agreement for Islamic International Factoring under the basis of their conventional factoring agreement with the supplier. The only restriction for the export factor may be the related goods or services that must be agreed on at the time of approval.