Musharaka is a mode of financing in the form of a partnership between the bank and its client whereby each party contributes to the capital of the partnership in equal or varying degrees either to establish a new project or share in an existing project.
- Profit is shared according to the free agreed profit sharing ratio
- Loss is shared proportionate to share of investment
- Each partner has the right to participate in the management of the business
- Risk and Reward are shared between the Bank and the Customer
- The Banks participate actively in the management of the business