Purchase With Recourse

What is PWR-𝙞

  • Cagamas purchases portfolio of certain types of Islamic financings (“Assets”) from approved Islamic financial institution or selected corporations (the ‘Approved Seller’ or ‘AS’ ) on a with recourse basis.
  • Upon the purchase, the beneficial ownership is passed to Cagamas while the legal title remains with the Approved Seller. The AS also holds the Assets in trust on behalf of Cagamas. 
  • The Assets are purchased at their book value, i.e., the principal balance outstanding, based on month end balance that is closest to the purchase date but not earlier than the end of the month preceding the purchase date.
  • The AS is required to remit periodic instalments ("Cagamas Instalments") at regular intervals. 
  • The purchase mechanism is either under Bai’ al-Dayn al-Sila’ii (purchase of debts with commodities) for sale-based financing products or under Bai’ al-A’ayaan (purchase of tangible assets) for lease-based financing products, depending on the underlying Shariah contracts of the originated financings.



Product Features

  1. Purchase Price: Principal balance outstanding as at the purchase date
  2. Rate Type: Fixed / Variable (Floating) 
  3. Instalment Frequency: Monthly / Quarterly / Semi-Annually / Annually
  4. Repurchase: Repurchase of defective financings on quarterly intervals
  5. Replacement: Replacement of repurchased financings by way of sale of new replacement financings at a value equivalent to the repurchased value
  6. Rollover Option: At maturity, the AS will be given an option to repurchase the pool of financings sold to Cagamas, or execute a new purchase contract for a further contracted review period based on new terms.



  1. Competitive pricing to the Approved Seller by tapping the capital market through AAA-rated Cagamas Sukuk.
  2. Avenue to raise Islamic funds at fixed and variable rates (apply Islamic hedging mechanism). 
  3. Diversify funding resources.
  4. No fee and transaction cost to the AS. 
  5. Fast turnaround time.
  6. Financings remain on the book of the AS to maintain the asset growth.