Mudaribah
Mudaribah is a financial partnership in Islamic finance where one party provides capital while the other offers expertise and management. The capital provider is known as the rabb al-mal, and the managing partner is called the mudarib. Profits generated from the investment are shared according to a pre-agreed ratio, while losses are borne solely by the capital provider.
This arrangement encourages entrepreneurship and investment without the payment of interest, aligning with Islamic principles. Mudaribah is commonly used in various sectors, including trade and real estate, promoting economic growth while adhering to ethical standards.