Agri Finance
Tractor Ijarah Finance Scheme
The BOK offers financing of Tractor for Agri. purposes under Tractor Ijarah Finance Scheme. "Ijarah" is a term of Islamic Fiqh. Lexically, it means to give something on rent. Ijarah is a contract whereby the owner of an asset, other than consumables, transfers its usufruct (benefits) to another person for an agreed period for an agreed consideration. In Ijarah/leasing, the corpus of leased commodity remains in the ownership of the lessor (Bank) and only its usufruct (benefits) is transferred to the lessee (customer). Anything which cannot be used without consuming the same cannot be leased out like money, edibles, fuel, etc. During the entire term of the ijarah, Bank being the owner of the assets retains the title of ownership and also bears all risks and rewards pertaining to ownership. All the risks related to usage of the assets are borne by the lessee (customer).
- Finance can be extended for new tractors of all types and powers.
- The Tractor will be registered in the name of Bank.
- BOK will acquire the assets required by the customer and then leases/Ijarah to customer for a fixed period.
- In Ijarah/leasing, the corpus of leased Tractor will remain in the ownership of the lessor (Bank) and only its usufruct (benefits) is transferred to the lessee (customer).
- Minimum security deposit for the facility will be 10% of the value of the Tractor.
- Rental/Profit Rate is 3-6 Months KIBOR + 500 BPS.
- Repayment will be in Quarterly/Half yearly installments.
- Premature termination allowed as per BOK-Islamic Banking Group’s procedure
- The finance tenure will be up to 5 years.
- Takaful coverage of Tractor throughout the finance period.
- Permanent Resident of Pakistan.
- Holder of Valid Computerized National Identity Card.
- Not a defaulter of any Bank/DFI
- Capable of repayment of the facility and satisfy security requirements of the Bank.
- Age must not be more than 65 years.
- The subject matter of Murabaha should be permissible in Shariah & Law.
- Must have sufficient experience in farming.
- Satisfactory Cash flow Assessment.
- Must have minimum 5 Acres of land under cultivation.