Meezan Tijarah is a Finished Goods financing facility for Customers to sell Finished Goods on Credit basis. The facility will enable the Customers to sell their Finished Goods stock, meet their working capital requirements and enjoy the benefits of Cash sales.
Under this concept the Bank will purchase the finished goods of the Customers and will appoint the Customer as its agent to sell the same goods in the market generally on Credit basis.
It is necessary for the validity of Finished Goods transaction that the price is fixed with the consent of the parties and that the necessary specification of the required items is fully settled between them. The Finished Goods price is ideally paid on Spot with immediate delivery of Goods.
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Finished Goods Agreement can be used for providing financing facility in transactions where final / transformed goods are available for sale. It is just like a normal sale purchase transaction where a seller (the Customer) sells a good to a buyer (the Bank) on cash basis. The Bank then appoints the Customer as its Agent to sell the same goods to a third party.
Finished Goods product can be easily utilized to facilitate payment of wages, overheads etc. in addition to raw materials. Hence, this product provides flexibility for the benefit of the Customers who deal with ready-to-sell items and have always demanded some facility to finance overheads, which may constitute a substantial portion of the production cost. It is also to be clarified that amount paid out as Finished Goods price to the Customer can be used by him anywhere he deems fit.
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