mudaraba
Installation
SKILL.md
THE STRUCTURE
Mudaraba: A partnership where:
- Rabb ul mal (capital provider): provides all the capital, bears all financial loss
- Mudarib (entrepreneur/manager): provides all the labour and management skill
In Islamic banking, the bank acts as MUDARIB for its Investment Account Holders (IAH), who are the rabb ul mal (capital providers).
Profits are shared in a pre-agreed ratio (e.g., bank 30%, IAH 70%). Losses are borne entirely by the IAH (unless caused by bank negligence or breach).
THE PROFIT POOL CALCULATION
The profit pool for IAH distribution is calculated as follows: