Financing and Credit Line (Loan)
The credit cycle from application to final settlement, based on Islamic financial contracts. Every transaction goes to the Financial Core as a balanced voucher, and financing data stays in its own database.
- Domain
- Islamic credit and financing
- Target customers
- Credit departments of banks and institutions, fintechs offering purchase credit
- Main capabilities
- 14 Islamic contract types, credit line, payment and installments, penalty and receivables provision, restructuring and settlement, BNPL consumer credit product
Loan is the platform's independent financing and credit line microservice and covers the full credit-granting cycle, from application to final settlement. It is built on Islamic financial contracts, and every transaction it produces is sent to AccountingCore as a balanced accounting voucher; financing data is kept in the service's own dedicated database.
The users of this service are the credit and financing operations department of a bank or a Qard al-Hasan institution, and also the product team of a fintech that wants to run a Buy Now Pay Later credit product on real accounting infrastructure instead of a parallel record-keeping system.
The technical distinguishing point of this service is a dedicated calculator for each contract type. Profit, voucher lines and repayment distribution are determined by the selected contract type, but all contracts follow one identical payment voucher model.
Key capabilities
14 Islamic contract types
Qard al-Hasan, Murabaha, installment sale, debt purchase, Ju'alah, lease-to-own (Ijara), Salaf, Istisna', Mudaraba, civil partnership, legal partnership, direct investment, Muzara'a and Musaqat, each with a configurable profit rate, grace period and fee
Three-party credit line
A supplier/fund/customer model with an agency fee and the supplier's share of profit, for financing paid out of the capital of an external entity
Payment and installments
Automatic generation of the installment schedule after approval, and installment payment with priority to penalty, then profit, then principal
Late penalty and arrears classification
Penalty calculation based on principal and days overdue, and automatic classification into past due, non-performing and doubtful
Doubtful receivables provision and final write-off
A provision rate based on loan status, and a final write-off voucher for uncollectible receivables
Restructuring and early settlement
Rescheduling of the installment schedule with no effect on the Financial Core, or full settlement with reversal of the remaining future profit
Final settlement with the supplier
After the last installment, repayment of the principal to the supplier can be recorded automatically
Consumer credit product (credit contract/BNPL)
Loading of a credit limit for the customer, free spending during the statement period, automatic conversion of the period's total spending into an installment financing at the end of the period, and automatic settlement with the last installment
Collateral integration
Assignment of collateral to each financing and a coverage check before disbursement
Nightly batch processing
Application of penalties, issuing of credit contract spending statements, and updating of loan statuses
Portfolio reports
Portfolio report by status and contract type, arrears, monthly collections and upcoming due dates
Branch-based financing numbering, with the ability to regenerate without hard-coding in the voucher preview (the preview always comes from the same real posting code)
Business value
Loan lets a financial institution run a wide range of Sharia-compliant contracts with a single engine, instead of implementing each contract separately. The unified voucher model reduces accounting errors across the different types of financing, and nightly batch processing keeps arrears classification and receivables provisioning up to date without daily manual work.
Use cases
- A bank or Qard al-Hasan institution that grants financing under various contracts to its customers
- A fintech that offers a Buy Now Pay Later (BNPL) credit product by connecting to a merchant and to the customer's wallet
- Lease-to-own companies financing vehicles or equipment
- Supply chain financing through debt purchase or Ju'alah
What sets it apart
- A single engine covers 14 contract types and the consumer credit product with one accounting model
- The credit limit control of the credit contract is calculated from the actual balance of the control account, rather than from a simple sum of issued financing, so that the limit is never occupied permanently
- Every voucher preview comes from exactly the same code that builds the final voucher; there is no gap between what the operator sees and what is posted
- Arrears classification and receivables provisioning run automatically every night
Solutions that use this module
See this module on demo data
In a demo session we walk through your organization's scenarios on Dara's demo environment and answer your technical and finance teams' questions.