Varieties of Mudaraba: There are two kinds of Mudaraba, and they’re talked about beneath:(1). Al Mudaraba Al-Muqayadah:Rab’ul-Maal could specify a specific enterprise or a specific place for the Mudaarib, wherein case he’ll make investments the cash in that individual enterprise or place. That is known as Al Mudaraba Al-Muqayadah (restricted Mudaraba).(2). Al Mudaraba Al Mutlaqah:Nonetheless if Rab’ul-Maal provides full freedom to Mudaarib to undertake no matter enterprise he deems match, that is known as Al Mudaraba Al Mutlaqah (unrestricted Mudaraba). Nonetheless Mudaarib can not, with out the consent of Rab’ul-Maal, lend cash to anybody. Mudaarib is allowed to do something, which is often performed in the middle of enterprise. Nonetheless in the event that they wish to have a rare work, which is past the traditional routine of the merchants, he can not accomplish that with out categorical permission from Rab’ul-Maal. He’s additionally not approved to:a) preserve one other Mudaarib or a partnerb) combine his personal funding in that individual Modarabah with out the consent of Rab-ul Maal.Situations of Supply & Acceptance are relevant to each. A Rab’ul-Maal can contract Mudaraba with multiple individual via a single transaction. It implies that he can provide his cash to ‘A’ and ‘B’ each so that every one among them can act for him as Mudaarib and the capital of the Mudaraba shall be utilized by each of them collectively, and the share of the Mudaarib.Distinction between Musharaka and Mudaraba(1). In Musharaka, all companions make investments, nevertheless in Mudaraba Finance, solely Rab’ul-Maal invests.(2). In Musharaka, all companions take part within the administration of the enterprise and might work for it. Nonetheless, in Mudaraba, Rab’ul-Maal has no proper to take part within the administration which is carried out by the Mudaarib solely.
(three). In Musharakha, all companions share the loss to the extent of the ratio of their funding. However in Mudaraba, solely Rab’ul-Maal suffers loss as a result of the Mudaarib doesn’t make investments something. Nonetheless that is topic to a situation that the Mudaarib has labored with due diligence.(four). In Musharaka, the legal responsibility of the companions is often limitless. If the liabilities of enterprise exceed its belongings and the enterprise goes in liquidation, all of the exceeding liabilities shall be borne professional rata by all companions. But when the companions agree that no associate shall incur any debt throughout the course of enterprise, then the exceeding liabilities shall be borne by that associate alone who has incurred a debt on the enterprise in violation of the aforesaid situation. Nonetheless in Mudaraba, the legal responsibility of Rab’ul-Maal is proscribed to his funding until he has permitted the Mudaarib to incur money owed on his behalf.(5). As soon as the companions combine up their capital in a joint-pool in Musharaka, all of the belongings turn into collectively owned by all of the companions, in accordance with the proportion of their respective funding. All companions profit from the appreciation within the worth of the belongings even when revenue has not accrued via gross sales. In Mudaraba financing, the products bought by the Mudaarib are solely owned by Rab’ul-Maal and the Mudaarib can earn his share within the revenue solely in case he sells the products profitably.Distribution of Revenue & Loss It’s needed for the validity of Mudaraba that the events agree, proper firstly, on a particular proportion of the particular revenue to which every one among them is entitled. The Shariah has prescribed no explicit proportion; quite it has been left to their mutual consent. They will share the revenue in equal proportions and so they may allocate totally different proportions for Rab’ul-Maal and Mudaarib. Nonetheless in excessive case the place the events haven’t predetermined the ratio of revenue, the revenue shall be calculated at 50:50.The Mudaarib & Rab’ul-Maal can not allocate a lump sum quantity of revenue for any celebration nor can they decide the share of any celebration at a selected price tied up with the capital. For instance, if the capital is 10,000 Pound Sterlings, they can’t agree on a situation that 1,000 Pound Sterlings out of the revenue shall be the share of the Mudaarib nor can they are saying that 20% of the capital shall be given to Rab’ul-Maal. Nonetheless they will agree that 40% of the particular revenue shall go to the Mudaarib and 60% to the Rab’ul-Maal or vice versa.It’s also allowed that totally different proportions are agreed in numerous conditions. For instance, the Rab’ul-Maal can say to Mudaarib “If you trade in wheat, you will get 50% of the profit and if you trade in flour, you will have 33% of the profit”. Equally, he can say “If you do the business in your town, you will be entitled to 30% of the profit and if you do it in another town, your share will be 50% of the profit”.Aside from the agreed proportion of the revenue, as decided within the above method, the Mudaarib can not declare any periodical wage or a charge or remuneration for the work performed by him for the Mudaraba. All colleges of Islamic Fiqh are unanimous on this level. Nonetheless, Imam Ahmad has allowed for the Mudaarib to attract his each day bills of meals solely from the Mudaraba Account. The Hanafi jurists prohibit this proper of the Mudaarib solely to a scenario when he’s on a enterprise journey exterior his personal metropolis. On this case he can declare his private bills, lodging, meals, and many others. however he isn’t entitled to get something as each day allowances when he’s in his personal metropolis.If the enterprise has incurred loss in some transactions and has gained revenue in some others, the revenue shall be used to offset the loss on the first occasion, then the rest, if any, shall be distributed between the events in accordance with the agreed ratio.
The Mudaraba turns into void (Fasid) if the revenue is mounted in any manner. On this case, all the quantity (Revenue + Capital) would be the Rab’ul-Maal’s. The Mudaarib will simply be an worker incomes Ujrat-e-Misl. The remaining quantity shall be known as (Revenue). This revenue shall be shared within the agreed (pre-agreed) ratio.Makes use of Of Musharaka/Mudaraba: These modes can be utilized within the following areas (or can change them in accordance with Shariah guidelines).Asset Aspect Financing- Any time period financing
– Undertaking financing
– Small and medium enterprises setup financing
– Massive enterprise financing
– Import financing
– Import payments drawn below import L/C
– Inland payments drawn below inland L/C
– Bridge financing
– LC with out margin (for Mudarba)
– LC with margin (for Musharaka)
– Export financing (Pre-shipment financing)
– Working capital financing
– Operating accounts financing/brief time period advancesLiability Aspect Financing- For present/saving/monthly-profit/funding accounts (deposit giving Revenue primarily based on Musharkah / Mudaraba – with predetermined ratio)
– Inter-Financial institution lending/borrowing
– Time period Finance Certificates & Certificates of Funding
– T-Invoice and Federal Funding Bonds/Debenture
– Securitization for giant initiatives (primarily based on Musharkah)
– Certificates of Funding primarily based on Murabahah
– Islamic Musharaka bonds (primarily based on initiatives requiring massive quantities – revenue primarily based on the return from the challenge)