Poverty to Profit: Islamic Microfinance - Part 2

The Islamic microfinance arrangement falls under the Mudarabah contract, a participative agreement in which one party provides capital (the principal) and the other (the worker) utilizes it for business purposes in which profit from the business is shared according to an agreed upon proportion, and loss, if any, unless caused by negligence or violations of contract by the worker, is borne by the principal. Some considerations comprehend the following: The bank as the principal should not interfere in the routine transactions of the business of the worker, though the bank is permitted to... More information: click

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