Mudaraba is a distinct financial partnership in Islamic finance. It involves two key parties: an investor (rab-ul-mal) who provides capital and a manager (mudarib) who contributes expertise. Unlike conventional financing, Mudaraba rejects interest-based transactions. Instead, profit is shared according to a pre-agreed ratio, and losses are borne by the investor unless mismanagement or fraud is […]
Islamic banks operate in accordance with Shariah law, offering an alternative to conventional financial institutions. They highlight morality, fairness, and tangible economic activity in every transaction. Unlike traditional banks that charge or pay interest, Islamic banks adhere to the principle of profit-and-loss sharing, ensuring financial relationships align with religious guidelines. Origins and Key Concepts Although […]
Mudaraba is one of the key financial instruments in Islamic economics and finance, fully compliant with Shariah principles. This mechanism is based on partnership and allows for more efficient distribution of risks and profits between investors and managers. In this article, we will explore the main aspects of mudaraba, its structure, and how it differs […]