• 2 days ago
What is Murabahah? Murabahah is a type of Islamic financing arrangement where a bank or financial institution purchases an asset and sells it to the customer at a marked-up price,

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with an agreed-upon profit margin. It is important to note that Murabahah differs from Mudarabah, another key concept in Islamic finance. Mudarabah meaning refers to a profit-sharing contract where one party provides capital and the other provides labor or expertise to carry out a business venture.

Mudarabah in Islamic banking is used to facilitate investments where profits are shared according to a pre-agreed ratio, while losses are borne solely by the provider of capital. The Mudarabah contract is a vital part of Islamic banking, promoting ethical investments while avoiding interest-based transactions.

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