Professional Documents
Culture Documents
SYSTEM
Riba Free Mode
of
Financing
Part 1
MODARABA
Modaraba
Commenda
Qarad
Three distinct concepts
appropriate
For
Riba Free Economic
MODARABA
Three names with an ancient background of
transactions used for economic activities classified as
business activities under a contract of
“Money and Ability”
The owner of money, the financier is called
Rab-Al-Maal
Qarad
It is a Hegari word generally found in Imam
Malik’s and Imam Shafei’s schools of
thought.
Modaraba
It is of Iraqi origin and found mostly in
Imam Abu Hanifa’s and Imam Ibn
According to Fuqaha Modaraba
It is a partnership contract between two parties,
persons or organizations in which one brings
the capital, the other shares his time and skill
for a specified project or transaction.