CONTENTS

C hapter Particular Page

No.

1. INTRODUCTION 1-6
2. REVIEW OF LITERATURE 7-10
3. Musharakah (<£J J ^ ) - Definition and Early 11-68
Development
3.1 Musharakah as “Partnership” 13
3.2 Musharakah as equity participation (Partnership 13
financing)
3.3 Musharakah (as a joint venture) 14
3.4 Types of Musharakah Financing 17
3.5 The nature of Musharakah contract 28
3.6 Accounting treatment of Musharakah 29
3.7 Measurement of banks share in Musharakah 34
capital at the time of contracting
3.8 Measurement aMhe end of Financial Period 35
3.9 Recognition of the Islamic Bank’s share in profits 35
or losses
3.10 Guarantees in Musharakah 36
3.11 Third Party Guarantee in Musharakah 37
3.12 Types of Modern Musharakah and its conditions 38
3.13 The Basic Rules of Musharakah 38
3.14 Difference between Musharakah and 50
Conventional Banking
3.15 Historical Background and Early Development 56
 3.16 Financing during The Prophet’s ^ 57
Era
3.17 History of Evolution of Diminishing Musharakah 66
or Musharakah Mutanaqisah
4. Legalistic View of Partnership 69-119
4.1 Definition of Partnership in Fiqh and Law 69
4.2 The Literal meaning of Sharikah 70
4.3 Technical meaning of Sharikah 72
4.4 The formation of a Sharikah 75
4.5 Definition of Partnership in English Law 80
4.6 Types of Partnership in English Law 84
4.7 Types of Partnerships and Companies in English 84
and Egyptian Law
4.8 Features of Modern Partnerships 86
4.9 Types of Partnerships in Islamic Law 88
4.10 The Vitiation and Termination of the Partnership 108
4.11 The effects of a Fasid Partnership 109
4.12 Comparison and Implications 113
4.13 Legalistic view of Musharakah 114
4.14 Legalistic view of Real Estate financing based on 115
Musharakah
5. Musharakah as an Instrument of Financing 120-163
5.1 Musharakah in micro-finance 121
5.2 Securitization of large projects based on 122
5.3 Project Financing 125
5.4 Long and short term projects 126
5.5 Musharakah financing in public sector 127
 5.6 Musharakah refinancing by the central bank 128
5.7 Musharakah financing for international business 130
5.8 Import financing 133
5.9 Export financing 135
5.10 Letters of credit 136
5.11 Musharakah in the form of Term Finance 139
Certificates
5.12 Financing of Working Capital 142
5.13 Application of Diminishing Musharakah 147
(Musharakah Mutanaqisah) in financing
5.14 Diminishing Musharakah (Musharakah 147
Mutanaqisah) in house financing
5.15 Musharakah in auto financing 153
5.16 Musharakah in purchasing a taxi 156
5.17 Musharakah in construction of a plant 157
5.18 Diminishing Musharakah Musharakah 157
Mutanaqisah) in trade
5.19 Financing through Musharakah bonds 160
6. Scope and Relevance of Musharakah 164-212
6.1 Application of Musharakah financing in 164
agriculture
6.2 Advantages of Musharakah financing in 171
agriculture
6.3 Musharakah in home financing 173
6.4 Operational issues of AL-Bay Bithaman Ajil(BBA) 176
Home financing
6.5 Illustrations of Al-Bay Bithaman Ajil(BBA) 178
financing
 6.6 Current practices of Diminishing Musharakah 187
(Musharakah Mutanaqisah)- type Home
Ownership Schemes
6.7 Musharakah as a Joint Venture 194
6.8 The Structure Of Musharakah Venture Capital 195
6.9 Selection Of The Musharakah Venture Capital 198
6.10 Cost of Musharakah Venture Capital 199
6.11 Benefits of Venture Capital 200
6.12 Musharakah Bonds 210
6.13 Musharakah Credit cards 211
7. Conclusion and Suggestions 213-242
7.1 Summary 213
7.2 Origin and Nature of the problems ofFinancing 217
through Musharakah
7.3 Identifications of the problems 218
7.4 Operational Problems 218
7.5 Research and Training 222
7.6 Developing of institutions 223
7.7 Suggestions for Overcoming MusharakahShort 225
comings in small scale enterprises
7.8 Conclusions and recommendations 228
7.9 Follow-up procedures and obligations of clients 240
8. Bibliography 243-276
Appendix i-v