Use Case 6

Import/Export Finance for Commodities & Goods

Exporters must fund production, shipping, and customs before any buyer payment arrives. Importers need time to sell inventory after delivery. That working capital gap is what traditional finance addresses with letters of credit, guarantees, or short-term loans.

SukukFi finances the full trade cycle: sourcing goods, paying suppliers, covering freight and insurance, and storing inventory in bonded warehouses until distribution. Both exporters and importers get funding tied to underlying goods and receivables, with repayment schedules they can predict.

How SukukFi Enables End-to-End Trade Finance

• Supplier funding: SukukFi pays producers upfront to secure inventory and manufacturing capacity.
• Trade logistics: SukukFi covers shipping, customs, and insurance to keep goods moving across borders.
• Bonded warehousing: SukukFi stores inventory under customs control, deferring duties and VAT until release.
• Distribution finance: Repayments are collected as the business sells goods to end customers, aligning cash flow to sales.

Shariah-Based Structuring

• Mudarabah: Capital providers fund trade activity while operating partners manage procurement and logistics, sharing profits by agreed ratios.
• Murabaha: SukukFi purchases goods and resells to the business at a disclosed markup, payable over time.
• Musharakah: SukukFi and the business jointly participate in trade inventory, sharing both risk and profit from actual sales.

Sharia conclusion: Funding stays asset-backed and tied to real trade flows, avoiding riba by linking returns to underlying goods, services, and sales performance.

Comparison to Traditional Trade Finance

• Letters of credit: Conventional LCs rely on bank guarantees and interest-bearing credit. SukukFi structures funding through asset-based trade transactions.
• Bank guarantees: Traditional guarantees charge fees for credit risk coverage. SukukFi allocates capital to goods and logistics with transparent profit sharing.
• Working capital loans: Interest-based facilities charge for the time value of money. SukukFi uses Murabaha or Musharakah to tie returns to real trade assets.
• Invoice discounting: Conventional finance advances cash at a discount. SukukFi funds receivables through asset-backed structures with disclosed profit margins.