Our Islamic Commercial Finance product provides customers seeking to invest in commercial properties or support their SME businesses with financing for business and commercial purposes, using salary assignment as the primary source of repayment. Additional eligible income or cash flows may also be considered when calculating the Debt Burden Ratio (DBR).
The product can be used for the following funding requirements:
- Working capital financing: for purchase of stocks, inventories, raw materials, finished goods, machinery, equipment, commercial vehicles/boats and computer systems through the mode of Murabaha Working Capital. Maximum Tenor 7 years.
- Fixed Asset Financing: Commercial Vehicles, Plant & machinery and Purchase/construction/renovation of Commercial properties like office spaces, warehouses, buildings and real estate, through the mode of Diminishing Musharakah and Forward Diminishing Musharakah. Maximum tenor 15 years
Eligibility Critera
Product Parameter: For Salaried Omani Citizens
1. Minimum Service Period — Government sector (except ROP and MOD): 1 year. Semi-government, ROP, MOD and private sector: 3 years.
2. Age — Minimum 21 years and maximum 60 years at the end of the financing. Up to 70 years, with DBR calculated on pension and a maximum of 50% of business cash flow.
3. Employer — Employer must be on NBO’s approved list of companies for Salary Related Loans.
4. Minimum Salary —
1,000.
5. Maximum Financing Tenor — 7 years for Murabaha Working Capital; 15 years for Diminishing Musharakah.
6. Installment Waivers — No waivers.
7. Debt Burden Ratio (DBR) / Financing Limit — 50% (60% if the customer has housing finance) for non-property-based Commercial Finance. 60% for property-based Commercial Finance.
If salary or pension is insufficient, 50% of business income shall be added to income for DBR calculation.
The following shall be ensured: DBR must be calculated strictly on the basis of evidenced current net salary/income/pension. Future income or statutory increments shall not be considered.
Other income may be considered only if it is verifiable, substantiable throughout the financing tenor and supported by appropriate documentation.
8. Insurance — Mandatory Life/Takaful Insurance coverage required.
9. Collateral / Security — Salary transfer/credit to Muzn and assignment of salary. Salary should not be drawn from the customer’s own business.
Additional security through a mortgage over assets (minimum coverage: 125%).
