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Diminishing Musharakah

The Dimishing Musharakah is a versatile financial instrument, through which Al-Falaah will join hands with you in providing the financial backing you require to initiate your business venture right from its inception. It is essentially a financing partnership, which ultimately provides complete ownership to a partner who purchases the shares of another partner by a redeeming mechanism agreed upon by both partners. In this regard, LOLC Finance will enter into a partnership with you in order to purchase a property and/or invest in a project of your choice, thereby becoming co-owners of it.

The ownership of the project will reflect on the financial contributions of each party, which, over an agreed period of time, will lead to the acquisition of all shares owned by LOLC Finance as you purchase a pre-agreed percentage of our share of the property/project periodically. Once the installments are complete, the asset becomes completely owned by you. The partnership then dissolves as the goal of the Diminishing Musharakah has been achieved.

  • Applicable only for instances of property purchase, property development and working capital purposes
  • Monthly installments on a reducing balance method at an agreed fixed term
  • Full ownership is transferred to you once the installments are complete