Potential Applications of Istisna Financing in Pakistan

Abstract

Istisna is an Islamic financial contract in which the product is manufactured by the manufacturer and sold to the buyer with stipulated terms and conditions. Istisna financing is widely contributing to the Islamic financial system. Previous studies on Istisna are just based on theoretical backgrounds. Istisna financing is being implemented in other Islamic countries such as Malaysia. However, the main purpose of this study is to explore how Istisna financing could be implemented in Pakistan. To investigate it, we conducted this research that is based on qualitative research methodology using a semi-structured survey to gather comprehensive information that presents a strong opinion of the participants. According to a preliminary survey, including Islamic banks and regulators, the results of this study show that Istisna is considered as a good product in Pakistan with unique features and capabilities.