#mudaraba

Mudarabah Partnership

The Mudarabah contract is a form of partnership between one who contributes efforts in the form of managerial skills (Mudarib) and the other who contributes capital (Rabb-ul-maal). Profit from the outcome of the venture is shared between the capital provider and manager. Profit will be shared according to mutually agreed profit sharing ratio. However, losses are borne solely…

What Is Mudaraba in Islamic Finance and Banking?

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Types of Mudaraba: There are two types of Mudaraba, and they are mentioned below:

(1). Al Mudaraba Al-Muqayadah:

Rab’ul-Maal may specify a particular business or a particular place for the Mudaarib, in which case he will invest the money in that particular business or place. This is called Al Mudaraba Al-Muqayadah (restricted Mudaraba).

(2). Al Mudaraba Al Mutlaqah:

However if Rab’ul-Maal…

Islamic Finance: Riba, Musharaka, Wakala, and Other Basics

Islamic financing might once mainly have been limited to the Middle East, but that’s no longer the case. It is growing and its influence felt across the world — now too big for leaders of traditional businesses to ignore.

Globally, Islamic finance markets (those governed by Islamic code) totaled $2 trillion as recently as 2017, according to the Research and Marketswebsite. That is a figure that…