Continuation
The musharakah
is a contract in which two parties agree on the capital shares.
Under this contract they both confer to a project.
Both parties
are involved in the implementation and management of the project.
As the
result, profits are divided according to the terms agreed in the contract.
Also accordingly,
losses are allocated in proportion to the capital contributed.
Under a mudarabah contract, the owner of
capital (rabb al-mal; the bank or the customer) gives money to the applicant (mudarib;
the entrepreneur or the bank in the case of indirect financing) for management.
The applicant
manages this assets given with a view towards making a profit.
From the research paper of
European Central Bank
(Authors: F.Mauro, P.Caristi, S.Couderc, A.D.Maria, L.Ho,
B.K.Grewal, S.Masciantonio, S. Ongena and S.Zaher)
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