Conditions according to Ijara in the “uzs” national currency
CONDITIONS ACCORDING TO IJARA
JSC "UZBEK LEASING INTERNATIONAL A.O."
IN THE “UZS” NATIONAL CURRENCY
IJARA is a lease or leasing agreement. The Ijara agreement, providing for the possibility of transferring the right to the leased property to the customer at the end of the Ijara period, is called "Ijara Muntahia-bi-tamleek" (lease ending with ownership). The purpose of this financing facility is to transfer the rental object to the lessee's name after the end of the lease term. The concept of this lease is the alternative to financial leasing used by Islamic finance institutions. Ijara has several forms reflecting different ways of transferring ownership rights, such as donation, sale and transfer of a share to the lessee by the lessor.
BASIC CONDITIONS AND REQUIREMENTS
ACCEPTABLE IJARA RECIPIENTS
Legal entities – private sector enterprises of various forms of ownership, or enterprises (including limited liability companies and joint-stock companies) with the state share in the authorized capital of no more than 25%, registered in the territory of the Republic of Uzbekistan
Ijara-recipients may be the enterprises operating for at least 2 (two) years at the time of filing the application for Ijara.
The total assets (balance sheet total) of the enterprise according to the last balance sheet (with the attached confirmation of the electronic tax report acceptance) should be at least 100% of the amount of Ijara financing.
NEGATIVE LIST
NEGATIVE LIST
- Equipment intended for activities or infrastructure related to the tobacco industry, casinos and gambling as well as to equipment and materials for military purposes
- Equipment intended for the liquor industry.
- Property that does not meet the requirements of Sharia;
ACCEPTABLE IJARA FACILITY
All types of new, used and restored equipment, mechanisms, vehicles and real estate for the purposes of production and business activities for enterprises in all sectors of the economy, excluding those indicated by the item "Negative List" and provided that:
- used and restored vehicle and specialized equipment cannot be older than 5 years;
- used and restored technological (production) equipment cannot be older than 7 years;
- there is a report of independent appraisal company regarding used and restored equipment, vehicles and special equipment.
ACCEPTABLE SELLERS
The sellers acceptable for concluding the contract for the supply of the Ijara facility are:
- Legal entities;
Sellers who are UNACCEPTABLE for concluding the contract for the supply of the Ijara facility are:
- Individuals;
- Legal entities that are related (affiliated) parties in relation to the Ijara-recipient.
AMOUNT OF FUNDING
The minimum amount is 10,000 US dollars / equivalent in the national currency;
The maximum amount is 4,500,000 US dollars / equivalent in the national currency;
The final decision on the approval or rejection of Ijara transactions in excess of 1,000,000 US dollars is made by the Supervisory Board of the "UZBEK LEASING INTERNATIONAL A.O." JSC.
FUNDING STAKE
- 100% of the total cost of the purchased Ijara facility; or
- up to 70% of the total cost of the acquired Ijara facility (in case of receipt of equity participation from the Ijara-recipient).
MARGIN (IJARA RATE)
On average, 18% per annum (fixed rate/flat)
О The final margin rate on Ijara may differ from the indicated one, depending on the source of financing and/or risk factors of each individual project according to the pricing policy of the "UZBEK LEASING INTERNATIONAL A.O. JSC.
IJARA TERM
At least 13 months to 5 (five) years
COLLATERAL SECURITY
The amount of collateral security for the project should be at least 50% of the amount of funding on Ijara in the form of:
- immovable property; or
- equipment; or
- movable property (machinery, vehicle); or
- bank guarantee; or
- surety, or
- repurchase guarantee of the Ijara facility supplier.
LIST OF PRIMARY DOCUMENTS FOR FILING THE APPLICATION
- Constituent documents of the Ijara-recipient and the Pledger;
- Document confirming the consent of all founders of the enterprise on Ijara receiving and certain project security provision;
- Financial Statements (balance sheet of the company, statement of financial results) with attached confirmation of acceptance of the electronic tax report (for the last 2 years, or from the date of commencement of the company's activities);
- Bank statement on the account status and the absence of arrears on the bank file of overdue payments No. 2, as well as overdue debts on bank loans (this document should preferably be issued after collecting other documents);
- Certificate of absence of tax arrears (this document should preferably be issued after collecting other documents);
- Bank certificate on the operation of the company's current account certified by the signature of the authorized employee and the stamp of the Bank for the last 12 months (debit and credit turnover);
- Business plan or feasibility study for the Ijara project, or, when purchasing construction and special equipment, as well as agricultural machinery, for the projects whose amount does not exceed 600 000,0 USD (in UZS equivalent): Calculation of Ijara maintenance;
- Orders or other internal documents of the Ijara-recipient and the Pledger on the appointment of the head and chief accountant;
- Official commercial offer of the Seller for the purchased Ijara facility;
- Report on determining the market value of the purchased (used) Ijara facility and the collateral/mortgage facility;
- Permits, if such are necessary for the implementation of the project and the implementation of activities;
- Title documents for the pledge/mortgage facility.
The above list of documents is not exhaustive for considering the feasibility of providing Ijara services. The "UZBEK LEASING INTERNATIONAL A.O." JSC reserves the right to request any other information and documents depending on the specifics of the project.
PRIMARY AND RELATED EXPENSES OF THE IJARA-RECIPIENT
- Commission for the study – 2% of the cost of the purchased facility (excluding VAT);
- Up to 3 months - the advance payments on Ijara, paid by the Ijara-recipient after the approval of the project and signing of the Ijara Agreement;
- Equity participation in the amount of 30% of the total value of the Ijara facility (in case of financing of 70% of the value of the Ijara facility by the Lessor);
- Insurance of the Ijara facility /collateral – All risks associated with the insurance of Ijara facility and additional collateral must be covered by Islamic insurance (Takaful) during the entire period of Ijara (covered by the Lessor and can be reimbursed at the expense of the client);
- Additional costs - on the date of transfer of the Ijara facility to the client, the parties approve a new payment schedule that takes into account all expenses incurred by the company "UZBEK LEASING INTERNATIONAL A.O." JSC in connection with the acquisition and delivery of the Ijara facility, including the costs of funds raised to finance the project;
OTHER PAYMENTS
- Commission for servicing Ijara: consisting of the amounts of expenses incurred by the Ijara-recipient for the implementation of the Ijara project (including VAT on these expenses);
- Commission for early repayment: 2% of the remaining Ijara debt at the time of early repayment (excluding VAT);
- Commission for registration (after Ijara completion): 10% of the amount of one monthly payment (excluding VAT);
- Penalty for overdue payments: 0.1% of the amount of overdue payment for each day of delay. The accrued amount of penalties for Ijara will be directed to charity.