What is the difference between tawarruq and murabaha?

Murabaha is essentially the sale of an asset you need: a car, a device, raw materials, for example.

Key points

• Tawarruq, on the other hand, aims primarily to obtain cash; a commodity is purchased on credit and then sold to a third party for cash.

• The simple question, "Do I need the commodity itself or the cash?" helps you understand why the structure used is different.

Source

• AAOIFI — Sharia Standard 30: Monetization (Tawarruq)