Mudaraba
Mudaraba ( Arabic مضاربة, DMG Muḍāraba ; often mudarabah ; German "speculation" ) describes a Sharia- compliant financing instrument in Islamic finance , which is generally a type of equity financing that is comparable in Germany to the silent society .
Forms of mudaraba
The Mudarabah treaty is between the Rabb al-Mal /رب المال / Rabbu L times , the investor ( Bank , lenders ), and the Mudarib /مضارب / muḍarib , an entrepreneur who uses the capital in a trading company or in an independent company . The capital can be brought in both in the form of monetary values ( capital contribution ) and in the form of material values ( contribution in kind ). If the Rabb al-Mal invests in the form of material assets (business premises, machines, etc.), a detailed assessment is necessary. If this does not happen, the Mudaraba is null and void from the start .
There are two types of Mudaraba:
- al-Mudarabat al-Muqayyada /المضاربة المقيدة / al-muḍārabat al-muqaiyada : This form is a restricted Mudaraba transaction, whereby the Mudarib is bound to certain guidelines of Rabb al-Mal. This can set the capital employed on a certain type of business or type of investment and thus limit the Mudarib's field of activity.
- al-Mudarabat al-Mutlaqa /المضاربة المطلقة / al-muḍārabat al-muṭlaqa : This is an unrestricted mudaraba transaction in which no investment restrictions are imposed on the mudarib. He can invest the capital as he deems appropriate, and this without restrictions in any enterprise. However, he is not entitled to bring another mudarib or partner into the business. The contribution of equity also requires the approval of Rabb al-Mal.
Functions of the contracting parties
In principle, the investor (Rabb al-Mal) is excluded from the management and from direct intervention in the management, but can be involved in the collaboration with the consent of the managing director (Mudarib). The latter, on the other hand, does not invest their own capital in the company, but contributes their labor and know-how and takes on a number of important functions:
- Amine /أمين / Amīn / 'Trustee': The Mudarib manages the invested capital (outside capital) in trust.
- Wakil /وكيل / Wakīl / 'Mediator': The Mudarib acts as a representative of the Rabb al-Mal in the conduct of commercial transactions.
- Sharik /شريك / Šarīk / 'partner': The Mudarib appears as a partner of the Rabb al-Mal, who divides it up between the parties according to the agreed criteria if a profit is made.
- Damin /ضامن / ḍāmin / 'Responsible': Should the company achieve negative profits or losses due to negligence on the part of Mudarib, he is liable for the damage incurred.
- Ajir /أجير / Aǧīr / 'Employee': If the company suffers high losses that lead to the bankruptcy of the Mudarabah and this was not due to the negligence of the Mudarib, then the latter is to be paid for his services like a normal employee.
Distribution of profits and losses in the Mudaraba
In order to validly conclude a Mudaraba, it is very important in advance that both parties (both the Rabb al-Mal and the Mudarib) agree on the distribution of profits and regulate this clearly in the contract. If this is not clearly written down, the profit will be distributed in equal percentages, correspondingly 50% to 50%. The contracting parties can freely choose the distribution according to their point of view. It is important to say that the mudarib cannot receive any period-based remuneration for his work, as there is always a profit sharing, i.e. H. neither party is entitled to a fixed monthly fee. As a result, the amount of remuneration on both sides depends on the amount of profit achieved and the percentage distribution.
If the company consists of several sub-areas, the profit generated is first used to compensate for any losses in another sub-area. Only then will the remaining profit be divided proportionally.
In the case of a Mudaraba, however, the Rabb al-Maal as the investor always bears the main risk should the company fail, since he is liable with his entire investment, unless the Mudarib can be shown to have acted with gross negligence, in which case he is liable. This risk is a typical risk and does not violate the Gharar -Verbot Sharia law.
Term or termination of the Mudaraba contract
The Mudaraba can be terminated by either party at any time, unless a precise term has been contractually stipulated. Once this has happened, the mudarabah ends after the set time has elapsed.
A termination of the Mudaraba means that the Mudarib is no longer entitled to do business with the property or in the name of the Mudaraba. However, he is allowed to sell trade goods that were previously purchased after completion.
When the Mudaraba is over, all assets are divided into the specified proportions.
literature
- Iqbal, Zamir; Mirakhor, Abbas: An Introduction to Islamic Finance: Theory and Practice. 2006, ISBN 978-0-470-82188-6
- Michael Gassner, Philipp Wackerbeck: Islamic Finance. Islam-compliant financial investments and financing . Bank-Verlag Medien, Cologne 2010, ISBN 978-3-86556-211-1 .
- M. Mahlknecht: Islamic Finance: Introduction to Theory and Practice . Wiley, 2009, ISBN 978-3-527-50389-6
- Hildebrandt: Islamic economic ideology . 1996, ISBN 3-87997-531-0 , p. 15
- Islamic banking in Germany - risk or opportunity from the perspective of German banks?
- Muhammad Zubair Usmani (Sharia Advisor): The Concept of Mudarabah
Web links
- e-Journal of Practical Business Research (PDF; 357 kB)
- wordpress.com
- failaka.com (PDF)
- middleeastinvestmentnetwork.com
- treuhaender.ch (PDF)
- muftitaqiusmani.com