Is the student of murabahah or istisna' considered a borrower, to whom the legal rulings of a borrower apply, or is the transaction a sale and purchase?
Murabaha is the sale of an item at its cost price with a known profit margin. It is valid whether the payment is immediate or deferred. If deferred, the buyer becomes a debtor, not a borrower, because their debt is in exchange for a sale transaction, not a loan. As for Istisna’a, it is a request to manufacture something that does not yet exist, with specific specifications and materials provided by the manufacturer, in exchange for financial compensation. The Islamic Fiqh Academy permitted it, provided that the type, kind, and specifications of the manufactured item are clearly defined, and the deadline is specified. In Istisna’a, it is permissible to defer the entire price or pay it in installments, and it is considered a debt, not a loan. Both Murabaha and Istisna’a have specific Shariah conditions and regulations that must be met.
Summary from Ftawy's records · added here
Reviewed by El Fatwa's sharia committee.
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