| Duration | 12 months |
|---|---|
| Min. Investment | ৳ 20,000 |
| Projected ROI | 15% per annum |
| Payout Structure | 6 installments |
| Risk Grade | B |
Overview
Darussunnat Nasariya Flour Mill is a food processing business looking to raise funds for purchasing raw materials for their factory. This is a halal “fixed return” campaign, and investors will be able to enjoy an ROI of 15% for a period of 12 months.
Darussunnat Nasariya Flour Mill
The Business
Darussunnat Nasariya Flour Mill is a food processing company, producing flour and quality bran (আটা, ময়দা, ভুষি ইত্যাদি) using wheat, cornflour, wheat bran, corn bran and other materials. The factory is 2 years old and uses German technology machineries.
Bangladesh has an appetite of catering to wheat imports of 6.4 million metric tonnes (mt) in a year, which is equivalent to BDT 182 billion.
Darussunnat generated a revenue of BDT 5.37 crore in 2020, and BDT 5.99 crore till Sep’21. The business slowed down due to syndicate pricing and unavailability of good quality wheat in the market, impacted by macroeconomic issues.
Darussunnat wants to be ready to be able to buy good quality wheat as soon as new shipments of wheat arrive to restart with renewed vigor, for which they need financing by the third week of January.
Address: 29/1, Shah Suja Road, 2 no. Kachari Golli, Nitaiganj, Narayanganj.
Proprietor Mr. Muhammad Abul Kalam is a long time businessman. He has experience working with machineries since 2005 and started his own trading business from 2011. His experience in trading processed food products and his knowledge of machineries led him to take the challenge of starting a flour mill himself. He took time to carefully set up the factory during 2019, and started processing from 2020.
He has successfully handled more than BDT 5 crore of business in two consecutive years. He employs 4 machine operators to look after his factory, 1 factory manager and several laborers on-demand basis to cater to his business.
- Long-term experience of doing business in this industry
- Good track record of business (yearly BDT 5 crore +) during the pandemic
- The commodity is a daily necessity, which will be unaffected by lockdown
The Contract
The investment is for a period of 12 months, from January 2022 to January 2023
ROI (total & annualized): 15%
biniyog.io will NOT charge the investors any fees for its services.
Example: if someone invests BDT 100k in the campaign, he/she can expect to receive a total of BDT 115k in installments by February 2023.
- Investors will go into a Murabaha agreement (sale contract) with Darussunnat Flour Mill
- It will be a fixed return contract, where Darussunnat Flour Mill will be buying raw materials (wheat) from investors at a markup price and pay the amount in pre-agreed installments
- biniyog.io will act as an agent for the investors and buy the products and take necessary ownership and risk of asset possession on their behalf, and then sell to Darussunnat Flour Mill
- biniyog.io has proposed that a markup price of 15% on actual cost will be charged to the business for the products, and Darussunnat Flour Mill has agreed that it’s a fair price for both the business and the investors
- Investors will get their returns in 6 installments.
- 10% in first 4 installments (Apr, Jun, Aug, Oct 2022)
- 20% in the next installment in Dec’22
- Remaining 40% in final installment in Feb’23
Shariah Compliance
Investors appoint biniyog.io as an agent to deal on their behalf (Wakalah) and invest into the business through buy and sale of assets under a fixed return (Murabaha) agreement.
biniyog.io‘s Shariah advisors have approved the basis and application of this Murabaha contract.
Potential Risks
Darussunnat Flour Mill has assets worth about 1 crore in the factory. They maintain financials in traditional paper based format, and are trying to move to technology based platforms.
Financial assessment and future prospect evaluation done by our in-house experts indicate that such businesses act on heavy volume and low margin. Example: per tonne sale price of flour is constant. But profit increases if the business can sell more, because some fixed costs don’t increase with more sales. Hence, the business needs more volume to generate more profit and repay in due time.
biniyog.io has had long discussions with Darussunnat Flour Mill to set repayment schedules in such a way that the business can self-sustain and make timely payments.
But investors need to keep in mind that wheat imports have been fluctuating for the past few months. If there is a sudden surge in wheat prices or issues with import, the business may be unable to meet some instalment deadlines. We tried to counter that by allowing multiple instalment while keeping the amount low for the first 6 months.
A further incentive has been offered to the business in the form of a discount on early repayment to mitigate repayment delays.
Following example is an illustration: if it repays within 9 months, the markup profit can be 12%. If it repays within 6 months, profit can be 9%.
In any case, this would be a term that benefits both parties – the business has to pay back less and investors get their money back faster at a higher annual rate of return (e.g. 9% in 6 months means 18% per annum)
Darussunnat has an existing loan of BDT 10 lac, to be settled within the next 1.5 years. The loan helped them pre-order wheat purchase, and additional funds raised through biniyog.io will enable them to buy the available wheat immediately. Our assessment indicates that the revenue generated can pay-off both the debts in due time.
biniyog.io will buy the necessary raw materials on behalf of investors first and secure the products for some time to ensure ownership. This is a necessary risk to ensure Shariah compliance of the transaction.
While chances of any damage occurring to the products are very low, investors will have to keep in mind that responsibility for such damage cannot be borne by the product buyer (Darussunnat Flour Mill).
biniyog.io will try to mitigate the risk by ensuring proper packaging of products and keeping the product in possession for the minimum possible time (an hour at most).
Darussunnat Flour Mill will share a post-dated cheque with biniyog.io, which will be kept as a security in case of any breach of contract.
Disclaimer
This investment opportunity is based on a first come first serve basis. Your investment is secured only after your transfer-proof has been received. If the investment quota is already filled, your transferred amount shall be returned.
Return of your capital is NOT guaranteed. Investment, by default, requires a risk appetite. Past performance is not a guaranteed indicator of future outcomes.
biniyog.io only acts as a consultant to the investor and the business, and does NOT manage funds for any party.
biniyog.io does risk assessment to a certain extent, but will NOT be liable if the business does not perform as per expectation.
For any questions, please use the chat icon on the right or leave a message.
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12-01-2022
This campaign is now live on biniyog.io!
The funding campaign has started. The target is BDT 15 lac with a stretch goal of BDT 20 lac. -
20-01-2022
Campaign extended for 3 days
The campaign has been extended for 3 days since many interested investors are struggling with the new wave of Covid-19.
