After several years of stagnation, the Algerian automobile market seems to be on the verge of a revival. Several announcements have come to enlighten Algerians about the future of the national automobile industry. Taking these elements into account, the National Bank of Algeria (BNA) announced in March 2023, the launch of the La MOURABAHA AUTOMOBILE service. The formula consists of halal loans for the acquisition of cars according to the precepts of Sharia.
Understand the principle of automotive murabaha
The bank proceeds to purchase the vehicle from the local dealer and then resells it to the customer at the same price accompanied by an agreed profit margin known in advance. The sale price is staggered over a period ranging from 1 to 5 years, with constant monthly payments .
The formula is intended for any person resident in Algeria, aged 65 maximum and justifying a stable and regular income greater than or equal to 40,000 DA.
The customer will be able to benefit from financing that can reach 85% of the price of the vehicle . The maximum repayment period will be spread over 60 months. The buyer will have the option of making a partial or total prepayment. The bank specifies that the files will be processed within a period not exceeding 05 days . It invites interested persons to visit its website.
What are the differences between halal and conventional credit?
The Minister of Industry, Ahmed Zeghdar, explains that halal credit for the purchase of a car differs greatly from conventional credit. Indeed, this type of financing in accordance with the terms of Islamic Sharia does not allow any bank interest or usury rights . It works through a non-profit loan system. The BNA specifies that imported vehicles are not concerned by this type of financing.
The principle of financing with participation
This first type of financing is based on the principle of profit and loss sharing . In one case, the bank is content to provide financial capital to the entrepreneur. We then speak of mudaraba, a passive partnership contract similar to the operation of a limited partnership in our traditional financial system. Indeed, the bank has no right of inspection over the management of the project.
In the event of failure, the capital loss is fully borne by the bank . Conversely, in the case of a mouchara, the bank can intervene in the management of the project. By its operating methods, this active partnership between the entrepreneur and the bank is similar to a joint venture commonly encountered in traditional finance. In the event of failure, the loss is borne by all the partners according to the capital contribution previously made by each.
The principle of financing without participation
Non-participating transactions mainly concern transactions of a commercial nature. Murabaha and ijara are the most used contracts . The first is a sales contract subject to specific clauses resulting from the principles set out by Sharia. The sale must be instantaneous, the object sold lawful and its price clearly displayed and justified. This type of contract can also be used as a source of financing.
In this case, the Islamic bank acts as a financial intermediary between the buyer and the seller. In fact, the bank buys a good in cash on behalf of a customer and then resells it to him at an increased price .
What are the advantages of Halal financing?
With this new method of financing, individuals can benefit from a multitude of advantages :
Optimal cash management without risk of over-indebtedness.
No additional application fees, the conditions are fixed and transparent.
An offer adapted to each project thanks to an amount of up to 85% of the price of the vehicle.
A simple and practical solution providing constant monthly payments.
In short, this financing technique is ideal for those who want to buy a new car without subjecting themselves to overly complex conditions. Thanks to it, they can acquire their vehicle quickly and easily. This unique method will therefore help to promote the return to growth of the automotive sector in Algeria.
