Shariah-Compliant Agriculture Financing through iFarmer: 

iFarmer follows the concept of Mudrabah for receiving and managing the fund for agriculture investment. 

The iFarmer Mudarabah Investment Guideline: 

This is an agreement made between two parties- Party A, 'Financier' is known as ‘Rabal-Maal’ the one who provides‘ 100 percent of the capital’ for the project and Party B, "iFarmer" is known as a ‘Mudarib’ who using his entrepreneurial skills, manages the project.

Profits arising from the project are distributed according to a predetermined ratio. Any losses accruing is borne by the provider of capital. The provider of capital has no control over the management of the project.

The Mudarib (iFarmer) will invest the funds provided by the ‘Rabal-Maal’ (Financier) for agricultural ventures and returns to the investor the principal and a pre-agreed share of the profit. 

Mudarabah Implementation Guideline for iFarmer:

1. Two parties (Financier and iFarmer) execute Mudaraba Agreement by way of which they decide that one party will provide Mudaraba capital and another party manages the capital for a particular period. 
2. The profit rate is to be pre-agreed between them. 
3. Mudarib (iFarmer) has management rights and, therefore, he will utilize the partnership capital in an agreed manner. 
4. At the end of the tenor, Mudarib (iFarmer) will return the principal and pre-agreed share of the profit to the Rabal-Maal (Financier). 
5. If the business incurs a loss, it will be borne by Rabal-Maal (Financier) if there happens no negligence on the part of Mudarib (iFarmer). 
6. Rabal-Maal (Financier) is not liable for the losses beyond the capital he has contributed.

Portfolio brief of iFarmer's Currently Active Shariah Farm:

• Each Farm contains 20 cattle. 
• All the cattle investment is received between a specific timeline. 
• All the 20 cattle are sourced within one month and the farm investment gets live on a specific date. 
• All the cattle are managed by our iFarmer Team for preset timeline will sell to the market for a better price and share profit with Financier (Within the contract timeline)
• All transactions for Shariah Farms are maintained separately through Shariah Compliant Banks.

Partnership with Farmer:

• A partnership agreement is signed between iFarmer and Farmer.
• Whereas Farmers are responsible for rearing the cattle. 
• iFarmer provides required management support to the farmer. 
• Farmer gets pre-decided profit sharing for his service.

Profit Distribution:

• Maturity = 06 month
• Financiers get investment capital and 40% of the profit or loss if made. 
• iFarmer gets 60% of the profit or loss including profit or loss sharing with farmers. 

Our Shariah Farms are based on a portfolio model, where the funder gets a profit portion based on the return of the overall portfolio of 20 cattle of each farm, not on specific cattle. From our previous experience, our expectation of the return would be between BDT 10,125 (7.5%) to BDT 16,875 (12.5%) .

For this farm, iFarmer has a farmer capacity of 5000+ skilled farmers who have experienced livestock farmers with adequate training. iFarmer consists of sector experts who continuously monitor operations to minimize the risk of loss within their best capacity.