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Mudaraba (مضاربة):
We may act as managing trustee (‘Modareb’) while you are the beneficial owner (Rab El-Maal). It is our responsibility to invest the funds that you provide. Alternatively, our roles may be reversed, when you, as managing trustee, are responsible for investing our funds. In each case, we shall agree on our relative share of any profits.

Mudarib: (مضارب):
In a mudaraba contract, the person or party who acts as entrepreneur.

Muamala (معاملة):
Literally: economic transaction. Technically, lease of land or of fruit trees for money, or for a share of the crop.

Murabaha (مرابحة):
A contract of sale between the bank and its client for the sale of goods at a price plus an agreed profit margin for the bank. The contract involves the purchase of goods by the bank which then sells them to the client at an agreed mark-up. Repayment is usually in instalments.

Musharaka (مشاركة):
The term refers to a financing technique adopted by Islamic banks. It is an agreement under which the Islamic bank provides funds which are mingled with the funds of the business enterprise and others. All providers of capital are entitled to participate in the management but not necessarily required to do so. The profit is distributed among the partners in predetermined ratios, while the loss is borne by each partner in proportion to his contribution.

Musaqa ( مصاقة):
A contract in which the owner of the garden shares its produce with another person in return for his services in irrigating the garden.

Muzara’a (مزارعة):
It is a contract in which one person agrees to cultivate the land of the other person in return for a part of the produce of the land.


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© Copyright Al Baraka Bank S.A.L 2010-2014 All rights reserved. Last Update March 21, 2017