Musharika


Also found in: Wikipedia.

Musharika

A partnership in Islamic finance in which all partners contribute capital. For example, if Joe wants to start a business, he may form a musharika into which he places $20,000. A bank may then contribute $40,000 and split profits with Joe based upon some agreed-upon formula.

Musharikas are important in Islamic finance in part because they are the most straightforward. That is, a musharika does not attempt to imitate a debt product, which is controversial. Rather, it simply involves equity financing by an investor. However, musharikas are difficult to structure in some non-Muslim countries, especially the United States, because some banks are not permitted to make equity financing arrangements.
References in periodicals archive ?
The authority may raise funds through any means considered appropriate in the circumstances including through real estate investment trusts, bonds, sukuk and other forms of finances obtained on the basis of participation term certificate (PTC), musharika certificates, term finance certificate or any other financial or debt instruments or securities.
The department offers the options of Working Capital Facilities, Contract Specific Finance, Purchase & Leaseback Facilities, Goods Murabaha Finance, Equipment/Vehicles Murabaha Finance, Trade Finance Facilities, Ijara Facilities, Diminishing Musharika, Istisna Facility and Wakala Bil Istithmar.
For instance, we introduced PLS, modaraba, musharika. Practically, there was no tangible impact on society, economy or polity.
"Specifically identified musharika assets are set to be utilized under a qualified shariah advisory board," it added.
Specifically Identified Musharika Assets are set to be utilised under a Qualified Shariah Advisory Board.
'Specifically identified Musharika (partnership) assets are set to be utilized under a qualified Shariah advisory board.
Specifically, identified Musharika assets are set to be utilized under a qualified Shariah advisory board.
In order to promote and incentivize Islamic Banking, special provisions have been introduced whereby tax neutrality has been accorded in the case of Musharika financing by extending the benefit of depreciation on assets co-owned in the case of a Musharika arrangement.
The business/financing activities currently undertaken by modarabas in Pakistan are ijarah/leasing, morabaha, musharika, trading, equity/portfolio financing and manufacturing /distribution.
canceled bail of Mufti Muhammad Ehsan Ul Haq, CEO of M/s Fayazi Gujranwala Industries Pvt Ltd and Ghulam Rasool Ayyubi in Modaraba and Musharika scam.
(26) The second form of partnership contract in IFB is musharika, where two or more parties provide capital for a shari 'a-compliant project.
II) A number of new Ijarah Murabaha and Diminishing Musharika transactions were executed successfully.