GLOSSARY
- maysir / maisir
- Gambling – a prohibited activity, as it is a zero-sum game just transferring the wealth not creating new wealth.
- mu'amalat / mu'amalah
- Lit: economic transaction. Technically, lease of land or of fruit trees for money, or for a share of the crop.
- mudarabah / mudaraba / modarabah / modaraba
- A form of business contract in which one party brings capital and the other personal effort. The proportionate share in profit is determined by mutual agreement at the start. But the loss, if any, is borne only by the owner of the capital, in which case the entrepreneur gets nothing for his labour.
- mudarabah sukuk
- A sukuk having mudarabah as an underlying structure.
- mudarib
- In a mudarabah contract, the person or party who acts as the entrepreneur.
- mufti
- An Islamic scholar, who interprets or expounds Islamic law and gives fatwa.
- murabaha / murabahah / morabaha
- A contract of sale between the bank and its client for the sale of goods at a price plus an agreed profit margin for the bank. The contract involves the purchase of goods by the bank which then sells them to the client at an agreed mark-up. Repayment is usually in instalments.
- murabaha, commodity
- A murabaha contract using certain specified commodities, through a metal exchange.
- musaqat / musaqah
- A contract in which the owner of the garden shares its produce with another person in return for his services in irrigating the garden.
- musharakah / musharaka
- An agreement under which the Islamic bank provides funds which are mingled with the funds of the business enterprise and others. All providers of capital are entitled to participate in the management but not necessarily required to do so. The profit is distributed among the partners in predetermined ratios, while the loss is borne by each partner in proportion to his contribution.
- musharakah, diminishing
- An agreement which allows equity participation and sharing of profit on a pro rata basis, but also provides a method through which the bank keeps on reducing its equity in the project and ultimately transfers the ownership of the asset to the participants.
- muzara'a
- It is a contract in which one person agrees to till the land of the other person in return for a part of the produce of the land.
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