Rock your resolutions. Take the Dummies challenge and you could WIN $1,000! Get Started.
How Sukuk (Islamic Bonds) Differ from Conventional Bonds
The Islamic Capital Market
Seven Prohibited Industries in Islamic Financial Investments

Types of Sukuk in Islamic Finance

Step 1 of 6
Previous
Next Slideshow
Next Slideshow

Sukuk al mudaraba (sukuk based on equity partnership)

In simple mudaraba contracts, investors are considered to be silent partners (rab al mal), and the party who utilizes the funds is the working partner (mudarib). The profit from the investment activity is shared between both parties based on an initial agreement.

The same type of contract applies to sukuk. In a mudaraba sukuk, the sukuk holders are the silent partners, who don’t participate in the management of the underlying asset, business, or project. The working partner is the sukuk obligator.

The sukuk obligator, as the working partner, is generally entitled to a fee and/or share of the profit, which is spelled out in the initial contract with investors.

  • Add a Comment
  • Print
  • Share
blog comments powered by Disqus
Risks Unique to Islamic Finance
Unique Financial Statements Used by Islamic Financial Institutions
Islamic Financial Institutions
The Forbidden Industries of Islamic Finance
The Islamic Unit Trust and Mutual Funds Market
Advertisement

Inside Dummies.com