A widely known profit sharing contract in Islam in which one party (the Rab al Maal) provides funds and the other (the managing trustee, the Mudarib) party provides management expertise. Profits are shared between the Rab al Maal and the Mudarib in a proportion agreed in advance. Losses, if any, are the liability of the former, and the latter loses his share in the expected profits. If, however, the loss is due to the negligence, fraud, or a breach of trust on the part of the Mudarib in handling the funds, he/she is totally responsible for the losses. Funds are to be used for Shariah -compliant activities.
Published in Chapter:
Empowering Community Through Entrepreneurship Training and Islamic Micro-Financing: Sharing the Experience of IIUM-CIMB Islamic Smart Partnership (i-Taajir)
Norma Md Saad (International Islamic University Malaysia, Malaysia), Mustafa Omar Mohammad (International Islamic University Malaysia, Malaysia), and Mohammed Aslam Haneef (International Islamic University Malaysia, Malaysia)
Copyright: © 2020
|Pages: 20
DOI: 10.4018/978-1-7998-2257-8.ch004
Abstract
Community economic development is a relatively new strategy employed to increase employment, income, and entrepreneurship activities in small town and communities. The Centre for Islamic Economics, International Islamic University Malaysia (IIUM) has initiated a smart partnership with CIMB Islamic Bank to offer entrepreneurship training and Islamic microfinance facility to the poor in Malaysia. This project adopts several modes of Islamic microfinance financing instruments which include equity-based and debt-based financing. The program aims to educate the communities surrounding the IIUM campus with entrepreneurship knowledge and skill in addition to giving Shariah-compliant micro-financing facility for them to implement their business ideas. CIMB Islamic, which is the main partner for this project, provides funds for Islamic microfinance facilities and IIUM contributes expertise in providing entrepreneurship trainings to the communities located near IIUM campus. It is hoped that this smart partnership would empower the surrounding communities and create more successful entrepreneurs.