Mudharaba in Islamic Legislation

Abstract

The concept "Mudharaba" is linguistically taken from the notion "hitting on the ground"; to roam for living. As a term, the concept is simply a contract of partnership between the money owner, on the one hand, and the money investor, on the other. Obviously, there is a difference between "Mudhraba" in the Islamic economy and conventional one; it is an alternative for usurious transactions to depend on legal investments in Islamic economy. In conventional economy, however, it is a transaction in which contracts and buyers without delivering the content of the contract, it is rather to make profit out of the difference between prices of today and yesterday. Hence, Islamic economy is the only solution to handle economic problems which countries face _these countries make use of usurious transactions as a way of dealing.