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Home > QFINANCE Dictionary > Definition of istisna'a

Definition of


Operations & Production

product manufacturing contract with agreed delivery and price in Islamic financing, a contract for manufacturing a product in which the manufacturer agrees to produce a specified product to be delivered at a specified time for a specified price

istisna'a - Related Articles
  • Infrastructure Finance: Islamic Alternative


    A number of projects had started to explore the use of Islamic financial structures, if not for the whole project then at least for a tranche of the total financing requirement. The most commonly used vehicle today for project finance is a combination of istisna’a (financing of a large asset during
    By Natalie Schoon

  • Key Islamic Banking Instruments and How They Work


    Istisna’a, another form of forward sales contract, is a longer-term financing mechanism under which a price is agreed before the asset described in the agreement is actually built. Sellers can then either create the asset themselves or subcontract, with buyers also having the option of paying the entire sum due either in advance or as installments during the manufacturing process

  • Sukuk: Islamic Bonds


    Sukuk deals typically fall into four main categories: ijarah, mudharabah, musharakah, and istisna’a. Ijarah sukuk are commonly employed in longer-term financing, typically leasing arrangements. Mudharabah sukuk are often used for profit-sharing between investors and entrepreneurs in ventures

  • Sukuk Issuance and Issues in Purchase Undertakings

    Best Practice

    A slight variation on this structure is the istisna’a/ijarah structure, pursuant to which the issuer/trustee will use the issue proceeds in two ways: (i) a portion will be used to fund the purchase price payable in respect of certain hard or already existing assets; and (ii) a portion will be used to fund the construction of certain other assets
    By Barry Cosgrave


Definitions of ’istisna'a’ and meaning of ’istisna'a’ are from the book publication, QFINANCE – The Ultimate Resource, © 2009 Bloomsbury Information Ltd. Find definitions for ’istisna'a’ and other financial terms with our online QFINANCE Financial Dictionary.

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