Answer to Question #159788 in Economics for Najam

Question

If you go to an Islamic bank and ask for financing for following purposes, which financial product Islamic bank will most likely to use and why?

Answer 1

If you go to an Islamic bank and ask for financing, then Islamic bank will most likely to use 10 years financing to start a new project. It is a form of partnership where one party provides the funds while the other provides expertise and management. The latter is referred to as the Mudarib. Any profits accrued are shared between the two parties on a pre-agreed basis, while loss is borne only by the provider of the capital.