A bank would normally finance many clients and sectors, not one partnership only. Some ventures may lose while others earn strong profits. A diversified portfolio can therefore absorb individual losses rather than making the whole institution depend on one business.
Diversification does not remove loss from every individual transaction. It reduces concentration risk by spreading financing across different clients, sectors and business outcomes.
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Partnership Financing (مشاركة): Practical Objections
A bank would normally finance many clients and sectors, not one partnership only. Some ventures may lose while others earn strong profits. A diversified portfolio can therefore absorb individual losses rather than making the whole institution depend on one business.
Diversification does not remove loss from every individual transaction. It reduces concentration risk by spreading financing across different clients, sectors and business outcomes.