MUDARABA

A form of partnership where one party provides the funds while the other provides expertise and management. The latter is referred to as the Mudarib. Any profits accrued are shared between the two parties on a pre-agreed basis, while loss is borne only by the provider of the capital.

 Mudaraba is a partnership agreement in which the investor (the Rab-ul-mal) provide the necessary finance
 While the recipient of the funds (the mudarib or the manager) provides the know how towards carrying out the venture