CHAPTER # 6 ISLAMIC MODES OF FINANCING. BY KOKAB MANZOOR. CHAPTER`s OUTLINES. SHARAKAT( MUSHARAKAH) MODARABA BAI-SALAM BAI-MURABAHA BAI-MUAJJAL IJARA. Introduction and Importance.
1 Sharakat( Musharakah)
2 Modarbah 3 Bai-Salam
4 Bai-Murabaha 5 Bai-Muajjal
It literally means sharing. The sharing may be of money, labor, or anything else.
1 Shirkat ul-milk
(partnership of ownership): It means joint ownership of two or more persons in a particular property.
2 Shirakal al-aqd (partnership of a contract): which means a partnership effect by a mutual contract.
This kind of Shirkah exists in three types:
The ratio of profit for each partner must be determined in proportion to the actual profit accrued to the business, and not in proportion to the capital invested by him.Basic Rules of MusharakahA) Distribution of profit
In the case of loss each partner shall suffer the loss exactly according to the ratio of his investment. If a partner has invested 40% of the capital, he must suffer 40% of the loss, not more, not less.
Most of the Muslim jurists are of the opinion that the capital of a joint venture must be in monetary form, but in some cases part of it can be contributed in commodities.
It is necessary for the validity of Mudarabah that the parties agree right at the beginning on a definite proportion of the actual profit to which each one of them is entitled. They can share the profit in equal proportions, and they can also allocate different proportions for the Rabb-ul-mal and the Mudarib.
purchased goods are delivered at spot, price may be either on spot or differed.
price may be on spot or differed
It is executed in particular commodity.
It can be executed in those things.
Definition of Aqd al-Ijarah:
The term Ijarah is used for two different situations: