Chapter 4 : Project Financing

What is Mudharabah financing?

• A type of insurance

• A type of loan

• A partnership for profit sharing

• A savings account

Who bears the losses in Mudharabah?

• The entrepreneur

• The customer

• The bank

• The capital provider

In Musharakah, how is profit shared?

• Based on capital contribution

• Equally among all partners

• By random selection

• Only to the active partner

What is a key feature of Musharakah?

• No capital contribution

• No risk sharing

• Equal rights for all partners

• Fixed profit amount

What does Istishna involve?

• Selling used items

• Ordering goods to be manufactured

• Renting equipment

• Buying goods that exist

What is Salam financing mainly used for?

• Buying stocks

• Insurance policies

• Agricultural products

• Real estate

In Salam, when is the full payment made?

• At the time of delivery

• Monthly or instalment as agreed by both parties

• At the beginning of the contract

• After the goods are received

What is a requirement for Salam contracts?

• No payment is needed

• Products must be unspecified

• Delivery time must be vague

• Quality and quantity must be specified

What is the main difference between Salam and Istishna?

• Istishna has no payment terms

• Istishna is for agricultural products

• Salam is for manufactured goods

• Salam requires full payment upfront

What does the term Rabbul-Mal refer to?

• The customer

• The entrepreneur

• The product being sold

• The bank providing funds