---
title: "SME and trade finance | IslamicOpenFinance™"
description: "Small firms need working capital fast; sale-based finance needs the bank to own the goods first. Stock murabaha, Salam for production, Istisna for manufacturing and more for SME and trade finance on IslamicOpenFinance™."
url: https://islamicopenfinance.com/sectors/sme-trade/
lang: en-GB
source: "IslamicOpenFinance"
---

> Small firms need working capital fast; sale-based finance needs the bank to own the goods first. Stock murabaha, Salam for production, Istisna for manufacturing and more for SME and trade finance on IslamicOpenFinance™.

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2. [Sectors](https://islamicopenfinance.com/sectors/)
3. SME and trade finance

Business

# SME and trade finance

Small firms need working capital fast; sale-based finance needs the bank to own the goods first.

SMEs finance stock, raw materials and shipments through murabaha, salam, istisna and agency-based services. Each needs documents in the right order: purchase orders, invoices, ownership and delivery. IslamicOpenFinance™ links those documents to the contract so the financier decides on real transactions and the evidence is ready for audit.

[Request a demo for this sector](https://islamicopenfinance.com/#start) See the live demo

Financial products

## What you build on IslamicOpenFinance™

1

### Stock murabaha

The bank buys the stock from the supplier, records ownership, and sells it to the SME on deferred terms.

2

### Salam for production

The buyer pays in advance for precisely specified goods delivered later, with delivery tracked against the contract.

3

### Istisna for manufacturing

A manufacturer is financed through stage payments for a specified item, with each stage evidenced.

4

### Wakalah trade services

The bank acts as agent for purchases or collections for a disclosed fee.

5

### Kafalah guarantees

Guarantees for suppliers or tenders are issued and tracked with their expiry and claims.

Value chain

## The actors in this chain

IslamicOpenFinance™ connects them with one contract model, one policy and one evidence trail.

SME Supplier Buyer Islamic bank Logistics provider Shariah Supervisory Board

[Standard setters and regulators in the directory](https://islamicopenfinance.com/directory/?sector=sme-trade)

Typical flow

## A typical flow, step by step

1. **Purchase order**
2. **Bank buys the goods**
3. **Ownership recorded**
4. **Sale to the SME**
5. **Delivery**
6. **Instalments**
7. **Reconciliation**

Live demo

## See it in the terminal

Khuzama Foods finances inventory by murabaha (demo): the supplier invoice and ownership event come before the sale. Demo data

**Demo** All institutions, people, amounts and events are fictional demonstration data. Nothing here is a Shariah ruling, an offer or advice; approving a product is for each institution's own Shariah board and regulator.

Glossary

## Key terms for this sector

[Murabaha](https://islamicopenfinance.com/glossary/murabaha) [Salam](https://islamicopenfinance.com/glossary/salam) [Istisna](https://islamicopenfinance.com/glossary/istisna) [Wakalah](https://islamicopenfinance.com/glossary/wakalah)

Other sectors

## Related sectors

[Business Corporate treasury Surplus cash needs an Islamic home; shortfalls need liquidity without interest. - Commodity murabaha placements - Wakalah investment - Liquidity sukuk holdings See the sector](https://islamicopenfinance.com/sectors/corporate-treasury/) [Business E-commerce and marketplaces Shoppers want to pay over time at checkout; the financier has to buy before it sells. - Murabaha at checkout - Profit-rate routing - Takaful at sale See the sector](https://islamicopenfinance.com/sectors/ecommerce/) [Real economy Food and agriculture supply chains Quality and origin run from farm to shelf; the financing should follow the same goods. - Salam for harvests - Input murabaha - Commodity-linked liquidity See the sector](https://islamicopenfinance.com/sectors/food-supply-chains/)

## Build SME and trade finance on IslamicOpenFinance™.

[Request a demo for this sector](https://islamicopenfinance.com/#start) [All sectors](https://islamicopenfinance.com/sectors/)