15% per annum
3 instalments (Dec '22, Jan '23, Feb '23)
RMB Colour House is a reseller of clothing color chemicals. Winter is a peak demand season of this product, and they are looking to raise funds to gain discount by purchasing in bulk, stock the inventory and sell during peak time.
This is a “buy-and sell” (Murabahah) contract where investors can enjoy an ROI of 5%* over 4 months (annualized expected return 15%).
*subject to investment risk (details below)
RMB Color House
RMB Colour House is a reseller of clothing colour chemicals, which are used in textile industry as raw materials. They have been operational for last 7 years.
They purchase directly from different importers, and their clients are at the Bongo market, the City plaza and small manufacturers in Narayanganj.
They deal with 171 types of products. Their products include different grades of rubber imported from China and Taiwan, different kinds of rubber adhesives, printing chemicals and other materials. Out of these, the major sales is generated from colour chemicals.
Shop Address: Road 5, Shantidhara KMS Garden City, Fatullah, Narayanganj
💡 Is there any investment risk involved?
Investments have risks by definition, especially if they are halal. Please find possible risk details for this campaign in the “Risk” section below.
💡 How is ‘fixed returns’ halal?
This is a sale contract (Murabaha) approved by our Shariah advisors, where investors will purchase products first (biniyog.io will facilitate the purchase), and then sell to RMB Colour House at a mark-up. This mark-up amount against sold product is the fixed return / profit for investors.
Details under “Contract conditions” and “Possession of Assets” part below.
Mr. Rahat Molla is the proprietor of RMB Colour House. He has education in Food & Nutrition. He started the business while he was still studying in University.
In his early days of the business, he would go to the importers’ offices, sit there and wait for appointment and a get good bargain. Overtime, he has managed to develop relationship with large importers, and now facilitates orders over phone calls. He has a detailed plan on what he wants to purchase and stock before the winter peak season starts, which he learnt over the last few years.
He is technology savvy, and uses an app to track debt and credit information.
He has other business operations, the biggest of which is Food flavouring chemicals. Others are screen print, trading etc. He keeps the operations and financials of all the businesses separate.
- Scale and volume of business is big, with a potential to grow if the business receives financing
- 7 years of experience in the business
- Risk diversified by several suppliers and buyers
The investment is for a period of 4 months, from mid October 2022 to end of February 2023.
Projected ROI (for the duration of project): 5%
Projected ROI (annualized): 15%
biniyog.io will NOT charge the investors any fees for this service.
Example: if someone invests BDT 100k in the opportunity, he/she can expect to receive a total of BDT 105k by end of February 2023.
- Investors will go into a Murabahah agreement (sale contract) with RMB Colour House for purchasing textile materials.
- It will be a “buy-and-sell” process where investors will first buy the products through biniyog.io. RMB Colour House will then buy those items from investors on credit and pay the amount over 4 months in 3 instalments.
- biniyog.io will act as an agent for the investors and buy the products, take necessary ownership and risk of asset possession on their behalf, and then sell to RMB Colour House.
- biniyog.io has proposed a price to RMB Colour House for the products after considering a minimum 5% profit on actual cost of product procurement. RMB Colour House has agreed to it.
- Investors can expect to get their returns over 4 months in 3 instalments:
- 10% by the end of Dec’22
- 20% by the end of Jan’23
- rest 70% by the end of Feb’23
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 an advanced buy-and-sell (Bai’ Murabaha) agreement.
biniyog.io‘s Shariah advisors have approved the basis and application of this Bai’ Murabaha contract.
- Exchange rate risk: The dollar rate has been unpredictable in recent weeks. Although we’re looking at some short-term stability for now, the future of the dollar exchange rate is very much uncertain. RMB Colour House resells products that are 100% imported. Therefore, the dollar exchange rate may bring down their profit margin.
- Mitigation: The fund to be raised from this campaign will be used to buy products at a bulk and avoid uncertainty. This will allow RMB Colour House to mitigate the risk of exchange rate.
- Inflation rate: Price hike of almost all commodities has put businesses out of their comfort zone. This applies for RMB Colour House as well.
- This is a global phenomenon, not a business specific risk. Therefore, its impact is almost same for all the businesses.
- High dependency on season-based sales: RMB Colour House‘s main sales come from two peak seasons that are the Eid-ul fitr and the winter season. The business generates low sales during the other months, which is enough to maintain operational costs.
- RMB Colour House has regular clients with significant amount of transactions with them. This client base can safeguard their seasonal risk.
biniyog.io will buy the products on behalf of investors first and secure ownership. The products will then be handed over to RMB Colour House within a very short time frame.
RMB Colour House would have the right to reject the products due to quality etc. The risk is expected to be minimal since RMB Colour House themselves will be choosing the items before biniyog.io buys them.
This is a necessary risk to ensure Shariah compliance of the transaction.
RMB Colour House has one external bank loan, which they have been repaying consistently as per EMI schedule.
Besides, the business is credit-heavy. Their way of doing business is that they deliver at 50% cash on delivery + rest on credit policy. This results in credit of approximately 12% of their yearly sales from their clients, which is a business norm. The credit is usually never fully cleared, but is reduced significantly during peak seasons.
biniyog.io has done in-house analyses of the revenue trend and profitability of the business and they are expected to be able to repay on time considering their cash-flow.
Please note that the business may be given an incentive in the form of a discount on early repayment, which can only come in effect if the investors agree.
Following example is an illustration:
If the business repays 100% within 3 months, the markup profit can be 4% (instead of 5%). This 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. 4% in 3 months means 16% per annum against current 15% per annum)
RMB Colour House will share instalment cheques with biniyog.io. A personal guarantee security cheque will also be kept from the business owner.
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.
This campaign is now live on biniyog.io!The funding campaign has started. The target is BDT 5 lac, with a stretch goal of BDT 7 lacs.
The campaign has been extended with stretched targetThe target of BDT 5 lac has been achieved, and campaign extended to achieve target of BDT 7 lac