ISLAMIC ENTREPRENEURSHIP

ISB 534
- Mudharabah (Profit Sharing) -
Prepared by :

MUHAMMAD AL-NASEEF B KAMARUDDIN 2010694218

MOHD AKIL B ADNAN 2010266566

AMIRUL AZZALI B MOHAMMAD 2010404952

ABDUL RAHIM YAAKUB 2010688008

Prepared to :

Ustaz Engku Ahmad B Engku Wok

 DEFINITION & ESSENTIAL OF MUDHARABAH
 DEFINITION
 Profit sharing between two parties
 One party provide capital and one party will be entrepreneur

 Entrepreneur will carry out bisness

 If profit, will share between both parties based on PSR agreement

 If loss, capital provider will bear it.

 Essential Element Of Mudharabah

 Owner(s) of capital (rabbul-maal )
 Entrepreneur (mudharib)

 Capital

 Business

 Profit Sharing (PSR Agreement)

 Contract (offer and Acceptance)

 CONCEPT OF MUDHARABAH (PROFIT
SHARING)
Mudharabah Project Financing

6
6

4
3

1. Green Business identify the project.

2. Green Business proposes to Tiger Islamic Bank to finance the project under
Mudharabah concept.
3. Green Business and Tiger Islamic Bank agree on PSR agreement.
4. Tiger Islamic Bank provide the capital required by Green Business.
5. Green Business runs/manage the project.
6. Profit generated from the project is shared between Green Business(Mudharib) and
Tiger Islamic Bank(Rabbul-Maal).
 TYPES OF MUDHARABAH

 Mudharabah Muthalaqah (absolute Mudharabah)

- No limitation as to the time or place or any particular types of
commerce or any particular vendor or purchaser. General
purpose investment.

 Mudharabah Muqayyadah (restricted partnership)

- Subject to certain limitation specific purpose investment
 EFFECT OF MUDHARABAH
 The person supplying the labour is a trustee
 In an absolute partnership, the entrepreneur is authorized to perform any
act connected with the partnership as an agent
 He, however, is not allowed to commit the mudharabah contract to any
sum greater than the capital in hand without specific permission from the
capital providers. Similarly, cannot borrow money in behalf of mudharabah
unless he is specifically authorized to do so.
 In a restricted partnership, the entrepreneur must confine his activities to
the conditions of the mudharabah.
 If any of the partnership property be destroyed, the amount thereof is first
deducted from the profit and may not be made a charge on the capital
 Any damage or loss must in any case (other than transgression or
negligence) be borne by the owner of the capital
 The capital provider is permitted to obtain guarantees from the
entrepreneur that are adequate and enforceable.
 The contracting parties can agreed on the duration of the mudharabah.
 MODERN APPLICATION OF MUDHARABAH
 Project financing
 Simple Partnership

 Takaful

 Unit trust
 TERMINATION OF MUDHARABAH
 Mudharabah can be terminated by either of the two parties at
any time as long a notice, per the contract term is given to other
party.
 Hanafi and Hanbali jurists are of the opinion that a maximum
term of the mudhrabah contract can be set.
 All jurists agree that one may not specify a minimum term of the
mudharabah contract.
CAMPARISON BETWEEN MUDHARABAH AND MUSHARAKAH
 THE END
THANKS YOU