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Home > QFINANCE Dictionary > Definition of mudaraba

Definition of



Islamic partnership between investor and entrepreneur in Islamic financing, a type of partnership in which one partner provides the capital while the other provides expertise and management. Each gets a prearranged percentage of the profits, but the partner providing the capital bears any losses.

mudaraba - Related Articles
  • Islamic Capital Markets: The Role of Sukuk

    Best Practice

    There are no shariah objections to financial markets, only to the interest-based instruments which are traded in the markets. Therefore, the first attempt to develop shariah-compliant debt instruments involved securitizing traditional Islamic financing instruments, as with the mudaraba certificates issued in Pakistan from 1980 onward after a law was passed giving legal recognition to the certificates
    By Rodney Wilson

  • Key Islamic Banking Instruments and How They Work


    This checklist provides an overview of Islamic banking instruments, such as murabaha, bai salam, istisna, ijara, and mudaraba.

  • Islamic Modes of Finance and the Role of Sukuk

    Best Practice

    Broadly speaking, Islamic modes of finance can be divided into two types: either they provide direct finance as capital funds through partnership (musharaka and mudaraba), or they provide indirect finance through leasing (ijara) and sale contracts (murabaha, bai ajil, salam, and istisna
    By Abdel-Rahman Yousri Ahmad


Definitions of ’mudaraba’ and meaning of ’mudaraba’ are from the book publication, QFINANCE – The Ultimate Resource, © 2009 Bloomsbury Information Ltd. Find definitions for ’mudaraba’ and other financial terms with our online QFINANCE Financial Dictionary.

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