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Posts Tagged ‘Musharka’

Islamic scholars have presented to 3 basic principles of Islamic finance. 1.What is Mudaraba?This type of financing is based on trust of both parties.It is a kind of partnership where one party called rub-ul-Amal provides financing for companies, while the second party to use its core competency to run the business.If profits are calculated separately, there is no reason to create a business.Profit is determined by an agreed ratio.Losses during Mudaraba is by funding providers beard if he is not related to another partner because of his misconduct.2.What is Musharka?It is based on a partnership agreement on the financing is based.Is that considered old-fashioned, because it only fertile for a small business.The only difference between Mudaraba and Musharka line is that both parties in Musharka funding are involved.The profits are shared in accordance with the agreed relationship between partners, but losses are in exact proportion to their investment ratio beard.3.What is Murabaha?It is the most populous Islamic form of financing.This category of bank purchases an asset to his client from a third party then sells to its customers with a small amount of profit at once or in installments.Some people have found the mark up financing technique, but in fact it is quite different than that