For commercial financing based on participation, two major structures are introduced early:
• partnership (مشاركة) — the parties participate in a joint business arrangement.
• investment partnership (مضاربة) — one side provides capital and the other manages the business.
Their detailed rules are different, but both connect return with real business activity rather than a fixed return on a loan.
Opening interactive controls...
The Basic Idea of Islamic Financing
For commercial financing based on participation, two major structures are introduced early:
• partnership (مشاركة) — the parties participate in a joint business arrangement.
• investment partnership (مضاربة) — one side provides capital and the other manages the business.
Their detailed rules are different, but both connect return with real business activity rather than a fixed return on a loan.