Qardus uses a Musharakah structure for investors and commodity Murabahah for customers requiring financing. Both structures have been developed based on AAOIFI Sharia Standards.
Musharakah is a joint enterprise or partnership structure in Islamic finance in which partners share in the profits and losses of an enterprise.
Under the commodity Murabahah agreement a Qardus Special Purpose Vehicle (SPV) uses the funding provided by the investors to acquire commodities (usually non-precious metals such as tin or steel available from the London Metal Exchange) from the open market that it sells to an SME at cost price plus a profit margin. The SPV, as the agent, then sells the commodities back to the open market on immediate payment terms and consequently the SME receives an amount of cash equivalent to the cost price of the commodities but has an obligation to pay to the SPV the cost of the commodities plus the agreed profit margin over the term of the facility.