Mudarabah

A partnership where one side provides capital and the other the work, sharing agreed profits.

Also written · Mudaraba · Modaraba · Mudharabah · Muzarabah · Qirad · Shirkat · Musharakah · Musharaka · Shirkah · Sharikah · profit sharing · silent partnership · venture partnership · Islamic partnership

The meaning

What Mudarabah means in Islam

Losses of money fall on the investor while the working partner loses his effort, unless he was negligent or broke the terms. Profit must be divided by a stated ratio and never as a fixed sum, since a guaranteed return would quietly turn the arrangement into an interest bearing loan. Musharakah is its sibling, in which both sides put in capital and share profit and loss by agreement. Both predate Islam and were confirmed rather than invented by it, and both underpin profit sharing accounts today.

Evidence · Editorial · Our own summary, drawn from the sources named

Read beside it

Words that sit beside it