Musharakah

Musharakah is an Islamic financing partnership where two or more parties share in the ownership, profits, and losses of an investment or project. Each partner contributes capital and has a proportional share in the venture. Profits are divided according to mutually agreed terms, while losses are shared in proportion to each partner’s contribution. This arrangement fosters collaboration and risk-sharing, aligning with Islamic principles that prohibit interest. Musharakah is often used for business financing, allowing partners to work together openly and ethically while sharing both the benefits and risks of their joint enterprise.