Definitions for "Mudaraba"
In Islamic finance, mudaraba is a form of business contract between two parties in which one party contributes all the capital while the other (entrepreneur) contributes personal effort.
any transaction in which one party acts as manager for another, an investor or rab al mal - owner of money. The agent or mudarib may invest with funds, property, or effort as a means to earn a portion of the return or a share of the loss. The agent may also be paid a fee for time and diligence. The investor does not take an active role in the project. Profits are shared according to a pre-agreed ratio. Losses are borne by the inves-tor.
(Trust Financing): Any transaction in which one party acts as the manager for the investors. The agent or mudarib may invest with funds, property, or effort as a means to earn a portion of the return or a share of the loss. The agent may also be paid a fee for time and diligence.