What is Invoice Financing?
Invoice Financing is a financing transaction based on invoices for collection management services.
Invoice Financing and Contract Mechanisms used:
1. The Beneficiary has a bill to the client/Payer (Muamalah relationship) which causes the Beneficiary to have the right to collect and manage documents.
2. The Beneficiary submits an application to ALAMI to find a party who is willing to provide document management and billing services.
3. ALAMI will offer Funders to provide billing and document management services for which a reward will be given (Wakalah bil Ujrah).
4. Funders authorize the services that should be carried out by the Funders (Wakalah).
5. In addition to providing services, Funders also provide loans (Qard) to Beneficiary.
6. ALAMI as the Funder's proxy enters into an Akad with the Beneficiary accompanied by forwarding of loan funds from the Funders. Based on this mechanism, the return or Ujrah is the right of the Beneficiary for billing and document management services (which were previously Wakalah to ALAMI).
Regarding the mechanism and use of the contract, it is in accordance with the DSN-MUI Fatwa NO. 117/DSN-MUI/II/118 concerning Information Technology-Based Financing Services Based on Sharia Principles.
What contract is used in Invoice Financing?
The Akad of Invoice Financing is based on the DSN Fatwa No. 67/DSN-MUI/III/2008 and 117/DSN-MUI/II/2018 used by ALAMi are Wakalah bil Ujrah and Qardh contracts.
Qardh is a loan agreement to another person without expecting anything in return. This contract is included in the Tabarru' (benevolence) contract. A person who is given a loan is obliged to return something he lent at the agreed time. If the customer does not show a desire to return part or all of his obligations and not because of his inability, LKS can impose sanctions on the customer in the form of selling collateral.
Wakalah is the delegation of power by one person to another to carry out an activity on behalf of the giver of the power. Wakalah is a contract from the Authorizer (Muwakkil) to the Recipient (Deputy) as his representative in acting. The power of attorney can receive compensation for services representing an activity from the power of attorney.
What is Ecosystem Financing?
Ecosystem Financing is a financing program for ecosystem members from ALAMI partners. Financing also focuses on micro-entrepreneurs who have been assessed internally by ALAMI's partners before being submitted to ALAMI.
What contract is used to finance Ecosystem Financing?
In general, the financing scheme that will be run by ALAMI is not much different from the DSN-MUI Fatwa No. 117/DSN-MUI/II/2018. However, in ALAMI's financing scheme, a contract has been established between the Provider (ALAMI) and the Beneficiary, namely trading with Akad Murabaha.
Murabahah is a trading agreement between a financial institution and the recipient of the financing. The financial institution buys the goods needed by the recipient of the financing and then sells it to the recipient of the financing at the cost of acquisition plus a profit margin agreed between the financial institution and the recipient of the financing.
What is a funding rating?
Rating is a quality scale given by ALAMI to a financing project which is taken from the results of credit scoring analysis. If a financing project has a high rating (close to 5), it means that the project has a medium-low risk, so the return or Ujrah value also adjusts. In this case, the rating is inversely proportional to the percentage of Return/Ujrah of a financing project.
What is a funding tenor?
Tenor is the duration of the loan agreement between the Beneficiary and the Funder. The financing tenor at ALAMI varies, with a maximum tenor of 180 days and an average tenor of 90 days.
Is the funding project at ALAMI insured?
ALAMI collaborates with Jamkrindo Syariah insurance. However, currently, not all financing is covered by insurance. Meanwhile, the terms & conditions will be re-analyzed. When there is financing that has been covered by insurance, there will be information regarding detailed information about the insurance used for the financing.
ALAMI always puts maximum efforts, from submitting a funding application so that there is no default, until now this has never happened, and ALAMI's TKB90 is 100%. Currently, the funding projects at ALAMI have passed the insurance risk profile test.
Why is the name of the Beneficiary not mentioned in full?
The information on the funding project contains the initials of the name of the Beneficiary, company profile, and business activities carried out. Company's conditions such as the their product or service areas, financial reports, etc., are available to be seen on the factsheet. Therefore, Funders can still find out the summary of the company's fundamentals and assess them comprehensively.
Where can I see projects that can be funded?
Projects that can be funded are available on the Funding page. If the Funding page is empty, it means that all funding projects have been funded. Every time there is new funding, ALAMI will inform you via email or notification from the application.
How long will a project be offered? What is the mechanism if the project has not been successfully funded within the specified time limit?
"The maximum financing offer period is 14 working days. If the funds collected are more than 55%, then the financing can be forwarded to the beneficiary. However, if it is less than 55%, the Borrower may choose to cancel the financing application, continue to take the collected financing, or extend the offer period. However, the average financing at ALAMI is successfully funded in 3-7 days."