Short Courses in Finance Online

With the introduction of online courses, it has become easy for individuals to earn graduate level finance knowledge from the comfort of their homes. The courses are great in extending knowledge on diverse, yet important finance topics such as personal finance management, insurance management, tax laws etc. Of all the courses that cover the fundamentals of finance, there are a few that cover the core concepts in short durations.

Investing in Your Future by Rutgers
Investments score over savings, and a course that offers the principles of investing your hard-earned money wisely, has been offered by Rutgers. Designed for beginners in the investment field, the course has 11 units that cover topics ranging from investing small amounts in the beginning and gradually moving to higher amounts. The course also covers stocks and bonds and gives a precise explanation on how each can be purchased. Those investments offering tax advantages are also discussed.

Entrepreneurial Finance at MIT
When you think of start-up ventures in any field, you should know the basics of entrepreneurial finance. Although you do not need to possess a finance background, entrepreneurial finance course offered by the renowned MIT discusses the necessary details of each element of this segment. The course is designed to assist beginners in their decisions in becoming a venture capitalist or entrepreneur.

Principles of Macroeconomics at MIT
Those who want to learn the macroeconomic issues associated with business and finance will find this course offered by MIT really helpful. Issues such as inflation, unemployment, interest rates etc. and fiscal policies are clearly discussed in the sessions offered online. The course also discusses the US and other international economies, and offer an insight into public debt and conflicts faced by economics.

Taxes and Business Strategy at MIT
Slightly different from other finance courses that cover the fundamental principles of finance and its sub topics, this course offered by MIT takes you through the concepts of tax accounting and tax strategies, without forgetting to explain a single element that is vital. From the role of taxes in business to analyzing the tax planning options, the course facilitates you to wisely implement the concepts of tax strategy in your business or personal life.

Personal Finance: Debt and Borrowing at Open University
Offered through four sections, the Personal Finance course offered through Open University discusses the debt issues faced in the UK region. From investigations on borrowing to making wise decisions before borrowing, the course extensively covers each topic. You will learn about the risks of having and accumulating debts, and how it can affect your personal and household finances. The concepts are the same of all, so can be applied in other countries as well.

Planning for a Secure Retirement at Purdue
The course offers short modules on planning and preparing for your retirement. It discusses how investments can be made that can ease your life after retirement. Any questions that arise out of your mind in planning for a healthy and tension-free retirement is discussed in the course. The modules also include genuine sources you can turn to, in order to secure your retirement.

These courses have been designed so that even individuals with no knowledge on finance can plan and implement them in daily life. There are numerous other finance courses online offered by renowned universities and finance institutions, free of cost. Some of these courses can be taken to the advanced level upon successful completion of the first part. However, an extensive study might require you to pay fees for the course, and in return render you a college-level credit.

A Dance With Finance – Make Sure You Take The Lead!

FINANCE:

Definition - A branch of economics concerned with resource allocation as well as resource management, acquisition, and investment. Simply, finance deals with matters related to money and the markets.

Role - Finance is used to raise money through the issuance and sale of debt and / or equity. Institutions could also use finance techniques to create balance sheets, general ledgers, profit and loss statements, etc..to determine the health of the business.

EFFICIENT MARKET:

Definition - A market in which the values of securities at any instant in time fully reflect all available information, which results in market value and the intrinsic value being the same.

Role - A good example of efficient markets in finance could be seen with the stock markets because information is available to all participants at the same time and the prices respond immediately to the available information.

PRIMARY MARKET:

Definition - Transactions in securities offered for the first time to potential investors.

Role - To illustrate the role that primary markets have in finance, people could look at “initial public offerings (IPOs)” in the stock markets where companies offer shares of common stock to the public for the first time.

SECONDARY MARKET:

Definition – The market in which stocks previously issued by the firm trades.

Role – The role that secondary market has in finance could be seen with numerous stock exchanges on Wall Street, such as the DOW, NASDAQ, etc. Through these stock exchanges, people trade company stocks.

RISK:

Definition – The likely variability associated with expected revenue or income streams.

Role – Risk plays an integral role in finance because it determines the probability that an actual return on investment (ROI) will be lower, or higher, than the expected return.

SECURITY:

Definition – A financing or investment instrument issued by a company or government agency that denotes an ownership interest and provides evidence of a debt, a right to share in the earnings of the issuer, or a right in the distribution of a property.

Role – The role that security has in finance could be seen when people make investments in securities such as bonds, debentures, notes, options, and shares that may be traded in financial markets such as stock exchanges.

STOCK:

Definition – Equity capital raised through sale of shares and it is the proportional part of a company’s equity capital represented by fully paid up shares.

Role – Stocks has a major role in finance because investors commonly trade stocks on a daily basis from a variety of institutions in the secondary market.

BOND:

Definition – A type of debt or a long-term promissory note, issued by the borrower, promising to pay its holder a predetermined and fixed amount of interest each year.

Role - A good example of the role of bonds in finance could be seen with how the government uses the purchase and sale of bonds to inject money into the economy.

CAPITAL:

Definition – Wealth in the form of assets, taken as a sign of the financial strength of an individual, organization, or nation, and assumed to be available for development or investment.

Role – The role that capital plays in finance is that institutions use capital, such as stocks, to create capital gains that could be used to improve on the overall business.

DEBT:

Definition - Consists of such sources as credit extended by suppliers or a loan from banks.

Role – Debt is used in finance to determine certain ratios pertaining to individuals or organizations. For instance, prior to giving out loans to individuals, banks tend to do background checks to determine the individuals “debt-to-income-ratio,” thus knowing if the loan is repayable.

YIELD:

Definition – The annual income earned from an investment, expressed usually as a percentage of the money invested.

Role – Yield is used in finance to determine how profitable an investment is, along with knowing if the investment is priced at a good value based on the “rate of return.”

RATE OF RETURN:

Definition – The annual percentage returned realized on an investment, which is adjusted for changes in prices due to inflation or other external effects. Expresses the nominal rate of return in real time, which keeps the purchasing power of a given level of capital constant over time.

Role – The role that the rate of return plays in finance is that people, including institutions, use this to adjust the nominal returns to compensate for factors, such as inflation, to determine how much of the investment is actually being returned.

RETURN ON INVESTMENT:

Definition – Return on investment (ROI) is the measure of a corporations profitability, equal to a fiscal year’s income divided by common stock and preferred stock equity plus long-term debt. The ROI is the income that an investment provides in a year.

Role – The ROI measures how effectively the firm uses its capital to generate profit; the higher the ROI, the better for the company.

CASH FLOW:

Definition – A measure of a company’s financial health, and equals cash receipts minus cash payments over a given period of time; or equivalently, net profits plus amounts charged off for depreciation, depletion, and amortization.

Role – In finance, investors and companies use cash flow to purchase assets in hopes of achieving higher ROIs. In addition, cash flow is also used to maintain the business or household, and is a necessary part of finance.

As mentioned, every entrepreneur must know their numbers. To do so, you must understand the lingual. Hopefully this post has assisted in helping you comprehend the common terms listed above better while taking the lead with your “dance with finance.”

Landscape of the Last 20 Years’ Infrastructural Financing in India

In this article following two major points are discussed to understand the whole scenario.

(1) Trend and Initiative of the Budgetary Support and Institutional Borrowings -

The system of managing and financing infrastructural facilities has been changing significantly since the mid-eighties. The Eighth Plan (1992-97) envisaged cost recovery to be built into the financing system. This has further been reinforced during the Ninth Plan period (1997-2002) with a substantial reduction in budgetary allocations for infrastructure development. A strong case has been made for making the public agencies accountable and financially viable. Most of the infrastructure projects are to be undertaken through institutional finance rather than budgetary support. The state level organisations responsible for providing infrastructural services, metropolitan and other urban development agencies are expected to make capital investments on their own, besides covering the operational costs for their infrastructural services. The costs of borrowing have gone up significantly for all these agencies over the years. This has come in their way of their taking up schemes that are socially desirable schemes but are financially less or non-remunerative. Projects for the provision of water, sewerage and sanitation facilities etc., which generally have a long gestation period and require a substantial component of subsidy, have, thus, received a low priority in this changed policy perspective.

Housing and Urban Development Corporation (HUDCO), set up in the sixties by the Government of India to support urban development schemes, had tried to give an impetus to infrastructural projects by opening a special window in the late eighties. Availability of loans from this window, generally at less than the market rate, was expected to make state and city level agencies, including the municipalities, borrow from Housing and Urban Development Corporation. This was more so for projects in cities and towns with less than a million populations since their capacity to draw upon internal resources was limited.

Housing and Urban Development Corporation finances even now up to 70 per cent of the costs in case of public utility projects and social infrastructure. For economic and commercial infrastructure, the share ranges from 50 per cent for the private agencies to 80 per cent for public agencies. The loan is to be repaid in quarterly installments within a period of 10 to 15 years, except for the private agencies for whom the repayment period is shorter. The interest rates for the borrowings from Housing and Urban Development Corporation vary from 15 per cent for utility infrastructure of the public agencies to 19.5 per cent for commercial infrastructure of the private sector. The range is much less than what used to be at the time of opening the infrastructure window by Housing and Urban Development Corporation. This increase in the average rate of interest and reduction in the range is because its average cost of borrowing has gone up from about 7 per cent to 14 per cent during the last two and a half decade.

Importantly, Housing and Urban Development Corporation loans were available for upgrading and improving the basic services in slums at a rate lower than the normal schemes in the early nineties. These were much cheaper than under similar schemes of the World Bank. However, such loans are no longer available. Also, earlier the Corporation was charging differential interest rates from local bodies in towns and cities depending upon their population size. For urban centres with less than half a million population, the rate was 14.5 per cent; for cities with population between half to one million, it was 17 per cent; and a huge number of cities, it was 18 per cent. No special concessional rate was, however, charged for the towns with less than a hundred or fifty thousand population that are in dire need of infrastructural improvement, as discussed above.

It is unfortunate, however, that even this small bias in favour of smaller cities has now been given up. Further, Housing and Urban Development Corporation was financing up to 90 per cent of the project cost in case of infrastructural schemes for ‘economically weaker sections’ which, too, has been discontinued in recent years.

Housing and Urban Development Corporation was and continues to be the premier financial institution for disbursing loans under the Integrated Low Cost Sanitation Scheme of the government. The loans as well as the subsidy components for different beneficiary categories under the scheme are released through the Corporation. The amount of funds available through this channel has gone down drastically in the nineties.

Given the stoppage of equity support from the government, increased cost of resource mobilisation, and pressure from international agencies to make infrastructural financing commercially viable, Housing and Urban Development Corporation has responded by increasing the average rate of interest and bringing down the amounts advanced to the social sectors. Most significantly, there has been a reduction in the interest rate differentiation, designed for achieving social equity.

An analysis of infrastructural finances disbursed through Housing and Urban Development Corporation shows that the development authorities and municipal corporations that exist only in larger urban centres operate have received more than half of the total amount. The agencies like Water Supply and Sewerage Boards and Housing Boards, that have the entire state within their jurisdiction, on the other hand, have received altogether less than one third of the total loans. Municipalities with less than a hundred thousand population or local agencies with weak economic base often find it difficult to approach Housing and Urban Development Corporation for loans. This is so even under the central government schemes like the Integrated Development of Small and Medium Towns, routed through Housing and Urban Development Corporation, that carry a subsidy component. These towns are generally not in a position to obtain state government’s guarantee due to their uncertain financial position. The central government and the Reserve Bank of India have proposed restrictions on many of the states for giving guarantees to local bodies and para-statal agencies, in an attempt to ensure fiscal discipline.

Also, the states are being persuaded to register a fixed percentage of the amount guaranteed by them as a liability in their accounting system. More importantly, in most of the states, only the para-statal agencies and municipal corporations have been given state guarantee with the total exclusion of smaller municipal bodies. Understandably, getting bank guarantee is even more difficult, specially, for the urban centres in less developed states and all small and medium towns.

The Infrastructure Leasing and Financial Services (ILFS), established in 1989, are coming up as an important financial institution in recent years. It is a private sector financial intermediary wherein the Government of India owns a small equity share. Its activities have more or less remained confined to development of industrial-townships, roads and highways where risks are comparatively less. It basically undertakes project feasibility studies and provides a variety of financial as well as engineering services. Its role, therefore, is that of a merchant banker rather than of a mere loan provider so far as infrastructure financing is considered and its share in the total infrastructural finance in the country remains limited.

Infrastructure Leasing and Financial Services has helped local bodies, para-statal agencies and private organisations in preparing feasibility reports of commercially viable projects, detailing out the pricing and cost recovery mechanisms and establishing joint venture companies called Special Purpose Vehicles (SPV).

Further, it has become equity holders in these companies along with other public and private agencies, including the operator of the BOT project. The role of Infrastructure Leasing and Financial Services may, thus, be seen as a promoter of a new perspective of development and a participatory arrangement for project financing. It is trying to acquire the dominant position for the purpose of influencing the composition of infrastructural projects and the system of their financing in the country.

Mention must be made here of the Financial Institutions Reform and Expansion (FIRE) Programme, launched under the auspices of the USAID. Its basic objective is to enhance resource availability for commercially viable infrastructure projects through the development of domestic debt market. Fifty per cent of the project cost is financed from the funds raised in US capital market under Housing Guaranty fund. This has been made available for a long period of thirty years at an interest rate of 6 percent, thanks to the guarantee from the US-Congress.

The risk involved in the exchange rate fluctuation due to the long period of capital borrowing is being mitigated by a swapping arrangement through the Grigsby Bradford and Company and Government Finance Officers’ Association for which they would charge an interest rate of 6 to 7 percent. The interest rate for the funds from US market, thus, does not work out as much cheaper than that raised internally.

The funds under the programme are being channelled through Infrastructure Leasing and Financial Services and Housing and Urban Development Corporation who are expected to raise a matching contribution for the project from the domestic debt market. A long list of agenda for policy reform pertaining to urban governance, land management, pricing of services etc. have been proposed for the two participating institutions. For providing loans under the programme, the two agencies are supposed to examine the financial viability or bankability of the projects. This, it is hoped, would ensure financial discipline on the part of the borrowing agencies like private and public companies, municipal bodies, para-statal agencies etc. as also the state governments that have to stand guarantee to the projects. The major question, here, however is whether funds from these agencies would be available for social sectors schemes that have a long gestation period and low commercial viability.

Institutional funds are available also under Employees State Insurance Scheme and Employer’s Provident Fund. These have a longer maturity period and are, thus, more suited for infrastructure financing. There are, however, regulations requiring the investment to be channeled in government securities and other debt instruments in a ‘socially desirable’ manner. Government, however, is seriously considering proposals to relax these stipulations so that the funds can be made available for earning higher returns, as per the principle of commercial profitability.

There are several international actors that are active in the infrastructure sector like the Governments of United Kingdom (through Department for International Development), Australia and Netherlands. These have taken up projects pertaining to provision of infrastructure and basic amenities under their bilateral co-operation programmes. Their financial support, although very small in comparison with that coming from other agencies discussed below, has generally gone into projects that are unlikely to be picked up by private sector and may have problems of cost recovery. World Bank, Asian Development Bank, OECF (Japan), on the other hand, are the agencies that have financed infrastructure projects that are commercially viable and have the potential of being replicated on a large scale. The share of these agencies in the total funds into infrastructure sector is substantial. The problem, here, however, is that the funds have generally been made available when the borrowing agencies are able to involve private entrepreneurs in the project or mobilise certain stipulated amount from the capital market. This has proved to be a major bottleneck in the launching of a large number of projects. Several social sector projects have failed at different stages of formulation or implementation due to their long payback period and uncertain profit potential. These projects also face serious difficulties in meeting the conditions laid down by the international agencies.

(2) Trend and Initiative of the Borrowings by Government and Public Undertakings from Capital Market -

A strong plea has been made for mobilising resources from the capital market for infrastructural investment. Unfortunately, there are not many projects in the country that have been perceived as commercially viable, for which funds can easily be lifted from the market.

The weak financial position and revenue sources of the state undertakings in this sector make this even more difficult. As a consequence, innovative credit instruments have been designed to enable the local bodies tap the capital market.

Bonds, for example, are being issued through institutional arrangements in such a manner that the borrowing agency is required to pledge or escrow certain buoyant sources of revenue for debt servicing. This is a mechanism by which the debt repayment obligations are given utmost priority and kept independent of the overall financial position of the borrowing agency. It ensures that a trustee would monitor the debt servicing and that the borrowing agency would not have access to the pledged resources until the loan is repaid.

The most important development in the context of investment in infrastructure and amenities is the emergence of credit rating institutions in the country. With the financial markets becoming global and competitive and the borrowers’ base increasingly diversified, investors and regulators prefer to rely on the opinion of these institutions for their decisions. The rating of the debt instruments of the corporate bodies, financial agencies and banks are currently being done by the institutions like Information and Credit Rating Agency of India (ICRA), Credit Analysis and Research (CARE) and Credit Rating Information Services of India Limited (CRISIL) etc. The rating of the urban local bodies has, however, been done so far by only Information and Credit Rating Agency of India, that too only since 1995-96.

Given the controls of the state government on the borrowing agencies, it is not easy for any institution to assess the ‘unctioning and managerial capabilities’ of these agencies in any meaningful manner so as to give a precise rating. Furthermore, the ‘present financial position’ of an agency in no way reflects its strength or managerial efficiency. There could be several reasons for the revenue income, expenditure and budgetary surplus to be high other than its administrative efficiency. Large sums being received as grants or as remuneration for providing certain services could explain that. The surplus in the current or capital account cannot be a basis for cross-sectional or temporal comparison since the user charges permitted by the state governments may vary.

More important than obtaining the relevant information, there is the problem of choosing a development perspective. The rating institutions would have difficulties in deciding whether to go by measures of financial performance like total revenue including grants or build appropriate indicators to reflect managerial efficiency. One can possibly justify the former on the ground that for debt servicing, what one needs is high income, irrespective of its source or managerial efficiency. This would, however, imply taking a very short-term view of the situation. Instead, if the rating agency considers level of managerial efficiency, structure of governance or economic strength in long-term context, it would be able to support the projects that may have debt repayment problems in the short run but would succeed in the long run.

The indicators that it may then consider would pertain to the provisions in state legislation regarding decentralisation, stability of the government in the city and the state, per capita income of the population, level of industrial and commercial activity etc. All these have a direct bearing on the prospect of increasing user charges in the long run. The body, for example, would be able to generate higher revenues through periodic revision of user-charges, if per capita income levels of its residents are high.

The rating agencies have, indeed, taken a medium or long-term view, as may be noted from the Rating Reports of various public undertakings in the recent past. These have generally based their rating on a host of quantitative and qualitative factors, including those pertaining to the policy perspective at the state or local level and not simply a few measurable indicators.

The only problem is that it has neither detailed out all these factors nor specified the procedures by which the qualitative dimensions have been brought within the credit rating framework, without much ambiguity.

In recent time India has made significant progress in mobilizing private investment for infrastructure. Infrastructure finance nearly doubled in the last decade and is expected to grow further under the government’s 12th Plan (2012-17), which calls for investments in the sector of about US$ 1 trillion, with a contribution from the private sector of at least half.

Still, it is not enough to draw final conclusion due to following reasons:

(1) Meeting the ambitious targets fully, will be challenging in long run,
(2) Major changes are needed in the way banks appraise and finance projects,
(3) The government has taken a number of recent initiatives to expand private investment in infrastructure, but their impact has not yet been felt.

But to consider last 20 years, the progress is steady and satisfactory enough.

What Is Mudaraba in Islamic Finance and Banking?

Types of Mudaraba: There are two types of Mudaraba, and they are mentioned below:

(1). Al Mudaraba Al-Muqayadah:

Rab’ul-Maal may specify a particular business or a particular place for the Mudaarib, in which case he will invest the money in that particular business or place. This is called Al Mudaraba Al-Muqayadah (restricted Mudaraba).

(2). Al Mudaraba Al Mutlaqah:

However if Rab’ul-Maal gives full freedom to Mudaarib to undertake whatever business he deems fit, this is called Al Mudaraba Al Mutlaqah (unrestricted Mudaraba). However Mudaarib cannot, without the consent of Rab’ul-Maal, lend money to anyone. Mudaarib is authorized to do anything, which is normally done in the course of business. However if they want to have an extraordinary work, which is beyond the normal routine of the traders, he cannot do so without express permission from Rab’ul-Maal. He is also not authorized to:

a) keep another Mudaarib or a partner

b) mix his own investment in that particular Modarabah without the consent of Rab-ul Maal.

Conditions of Offer & Acceptance are applicable to both. A Rab’ul-Maal can contract Mudaraba with more than one person through a single transaction. It means that he can offer his money to ‘A’ and ‘B’ both so that each one of them can act for him as Mudaarib and the capital of the Mudaraba shall be utilized by both of them jointly, and the share of the Mudaarib.

Difference between Musharaka and Mudaraba

(1). In Musharaka, all partners invest, however in Mudaraba Finance, only Rab’ul-Maal invests.

(2). In Musharaka, all partners participate in the management of the business and can work for it. However, in Mudaraba, Rab’ul-Maal has no right to participate in the management which is carried out by the Mudaarib only.

(3). In Musharakha, all partners share the loss to the extent of the ratio of their investment. But in Mudaraba, only Rab’ul-Maal suffers loss because the Mudaarib does not invest anything. However this is subject to a condition that the Mudaarib has worked with due diligence.

(4). In Musharaka, the liability of the partners is normally unlimited. If the liabilities of business exceed its assets and the business goes in liquidation, all the exceeding liabilities shall be borne pro rata by all partners. But if the partners agree that no partner shall incur any debt during the course of business, then the exceeding liabilities shall be borne by that partner alone who has incurred a debt on the business in violation of the aforesaid condition. However in Mudaraba, the liability of Rab’ul-Maal is limited to his investment unless he has permitted the Mudaarib to incur debts on his behalf.

(5). Once the partners mix up their capital in a joint-pool in Musharaka, all the assets become jointly owned by all the partners, according to the proportion of their respective investment. All partners benefit from the appreciation in the value of the assets even if profit has not accrued through sales. In Mudaraba financing, the goods purchased by the Mudaarib are solely owned by Rab’ul-Maal and the Mudaarib can earn his share in the profit only in case he sells the goods profitably.

Distribution of Profit & Loss

It is necessary for the validity of Mudaraba that the parties agree, right at the beginning, on a definite proportion of the actual profit to which each one of them is entitled. The Shariah has prescribed no particular proportion; rather it has been left to their mutual consent. They can share the profit in equal proportions and they can also allocate different proportions for Rab’ul-Maal and Mudaarib. However in extreme case where the parties have not predetermined the ratio of profit, the profit will be calculated at 50:50.

The Mudaarib & Rab’ul-Maal cannot allocate a lump sum amount of profit for any party nor can they determine the share of any party at a specific rate tied up with the capital. For example, if the capital is 10,000 Pound Sterlings, they cannot agree on a condition that 1,000 Pound Sterlings out of the profit shall be the share of the Mudaarib nor can they say that 20% of the capital shall be given to Rab’ul-Maal. However they can agree that 40% of the actual profit shall go to the Mudaarib and 60% to the Rab’ul-Maal or vice versa.

It is also allowed that different proportions are agreed in different situations. For example, the Rab’ul-Maal can say to Mudaarib “If you trade in wheat, you will get 50% of the profit and if you trade in flour, you will have 33% of the profit”. Similarly, he can say “If you do the business in your town, you will be entitled to 30% of the profit and if you do it in another town, your share will be 50% of the profit”.

Apart from the agreed proportion of the profit, as determined in the above manner, the Mudaarib cannot claim any periodical salary or a fee or remuneration for the work done by him for the Mudaraba. All schools of Islamic Fiqh are unanimous on this point. However, Imam Ahmad has allowed for the Mudaarib to draw his daily expenses of food only from the Mudaraba Account. The Hanafi jurists restrict this right of the Mudaarib only to a situation when he is on a business trip outside his own city. In this case he can claim his personal expenses, accommodation, food, etc. but he is not entitled to get anything as daily allowances when he is in his own city.

If the business has incurred loss in some transactions and has gained profit in some others, the profit shall be used to offset the loss at the first instance, then the remainder, if any, shall be distributed between the parties according to the agreed ratio.

The Mudaraba becomes void (Fasid) if the profit is fixed in any way. In this case, the entire amount (Profit + Capital) will be the Rab’ul-Maal’s. The Mudaarib will just be an employee earning Ujrat-e-Misl. The remaining amount will be called (Profit). This profit will be shared in the agreed (pre-agreed) ratio.

Uses Of Musharaka/Mudaraba:

These modes can be used in the following areas (or can replace them according to Shariah rules).

Asset Side Financing

- Any term financing
- Project financing
- Small and medium enterprises setup financing
- Large enterprise financing
- Import financing
- Import bills drawn under import L/C
- Inland bills drawn under inland L/C
- Bridge financing
- LC without margin (for Mudarba)
- LC with margin (for Musharaka)
- Export financing (Pre-shipment financing)
- Working capital financing
- Running accounts financing/short term advances

Liability Side Financing

- For current/saving/monthly-profit/investment accounts (deposit giving Profit based on Musharkah / Mudaraba – with predetermined ratio)
- Inter-Bank lending/borrowing
- Term Finance Certificates & Certificate of Investment
- T-Bill and Federal Investment Bonds/Debenture
- Securitization for large projects (based on Musharkah)
- Certificate of Investment based on Murabahah
- Islamic Musharaka bonds (based on projects requiring large amounts – profit based on the return from the project)