What is the term for Islamic finance profit-sharing partnerships, where one party provides capital and the other provides expertise?
AMurabaha
BIjarah
CMudarabah
DMusharakah
Explanation
– Mudarabah refers to an Islamic finance partnership structure in which one party provides capital while the other contributes expertise and management, with profits shared according to a pre-agreed ratio.
– Losses in this arrangement, unless due to negligence, are generally borne solely by the capital-providing party, distinguishing it from conventional loan-based financing.
– For exams, note that Musharakah differs slightly, referring to a joint partnership where both parties contribute capital and share both profit and loss proportionally.
Exam Relevance
- Topic: Contemporary Issues
- Subtopic: Islamic Banking

No Comments