What is Istisna in Islamic finance?

Istisna is a Sharia-compliant contract for manufacturing or construction where the buyer orders an item to be made according to specific specifications. The price and payment terms are agreed upon upfront, making it ideal for construction projects, custom manufacturing, and development.

How is Istisna different from Murabaha?

Murabaha is for existing goods where the bank buys and resells at markup. Istisna is for items that need to be manufactured or constructed. In Istisna, the item doesn't exist yet at contract time, and payment can be flexible (advance, milestones, or deferred).

What is Parallel Istisna?

Parallel Istisna is when the bank enters two separate contracts - one with the customer (as seller) and another with the manufacturer/contractor (as buyer). This allows the bank to facilitate financing without actually manufacturing the goods themselves.

What can Istisna be used for?

Istisna is commonly used for home construction, commercial building development, infrastructure projects, custom manufacturing, shipbuilding, aircraft manufacturing, and any project where goods are made to order.

Istisna Calculator

Islamic financing for construction and manufacturing projects.

Istisna Financing Calculator

Calculate Sharia-compliant construction and manufacturing finance

☮ 100% Sharia Compliant Contract

Select Project Type

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Construction

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Manufacturing

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Infrastructure

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Custom Order

Project Details

Project Cost ($) Total construction/manufacturing cost

Project Duration (Months) Time to complete the project

Istisna Financing Terms

Bank Profit Margin (%) Bank's profit on the contract

Deferred Payment Period (Months) Installment period after completion

Payment Structure

Advance Payment (%) Upfront payment at contract signing

Milestone Payments (%) Payments during construction

Deferred Payment (%) Remaining balance (auto-calculated)

Number of Milestones Payment checkpoints during project

Istisna Financing Summary

Total Istisna Price

Final contract price

Project Cost

Base manufacturing cost

Bank Profit

Halal profit margin

Monthly Installment

After completion

Istisna Contract Structure

Customer

You

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Istisna Contract
$0

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Bank/Financier

Seller

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Delivery

0 months

Payment Timeline

★ Payment Milestones

💰 Payment Breakdown

Advance Payment $0

Milestone Payments $0

Deferred Balance $0

Total Contract $0

Payment Distribution

Advance (0%)

Milestones (0%)

Deferred (0%)

🔁 Parallel Istisna Structure

Customer

Buyer

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Contract 1

Istisna

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Islamic Bank

Financier

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Contract 2

Parallel Istisna

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Contractor

Manufacturer

Bank enters two separate Istisna contracts - one with you and another with the contractor

Complete Payment Schedule

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Phase	Description	Timing	Amount	Cumulative

Understanding Istisna Financing

What is Istisna?

Istisna (Arabic: manufacture) is a contract where a buyer orders an item to be manufactured according to specific specifications. Unlike a regular sale, the item doesn't exist at contract time. It's commonly used for construction, custom manufacturing, and development projects.

Key Features of Istisna

Price is fixed at contract signing
Specifications are detailed upfront
Flexible payment structure allowed
Both parties share risk appropriately
No interest (riba) involved

Payment Flexibility

Advance: Payment at contract signing
Milestone: Payments during construction phases
Deferred: Installments after completion
Any combination is Sharia-compliant

Common Applications

Home construction financing
Commercial building development
Infrastructure projects
Ship and aircraft building
Custom equipment manufacturing