All termsstructures
Mudaraba
مضاربة
A profit-sharing partnership where one party provides capital and the other provides expertise.
In Mudaraba, the investor (rabb al-mal) provides the funds. The entrepreneur or fund manager (mudarib) provides the work and expertise. Profits are split at an agreed ratio. Losses are borne by the investor (unless caused by negligence).
Islamic perspective
Mudaraba is the structure behind many Islamic savings accounts. Your deposit is the capital, the bank uses it productively, and you share in the profit rather than receiving fixed interest.
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