Continuation
The profit,
in turn, will be divided between the parties on a percentage basis.
The
percentage of distribution specified in the contract.
Usually, it
is a share of total income (or final profit) and, as such, no fixed sum.
The same
operation can also be used for indirect financing.
The agent who
has received the capital can conclude a mudarabah contract with a third party.
The third
party, in its turn, will then invest that capital in productive activities.
This is
called double-tier mudarabah.
Mudarabah contracts
are commonly used for:
-
the management of mutual funds;
-
and the structuring of sukuk.
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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