Friday, March 19, 2010

The Early Practice of Mudharabah

The Prophet Muhammad (SAW) , he was the one who ‘initiated’ the mudharabah venture in several business expeditions with Saidatina Khatijah (RA) later his wife, a successful businesswoman during pre-Islamic era. The popularity of the Prophet Muhammad (SAW) as a trustworthy man (al-ameen) had attracted the latter to appoint him as ‘mudharib or entrepreneur’ in the business venture and she herself acted as ‘rabbul mal’ or capital provider. Upon the completion of the venture, both of them entitled the ‘profit sharing’ at pre-agreed ratio decided before commencing of the venture.

As a matter of facts that Saidatina Khatijah (RA) was very ‘satisfied’ with the ‘entrepreneurship’ of the Prophet Muhammad (SAW) and also with the ‘profits’ that he brought ‘home’. To her, the appointment of Prophet Muhammad (SAW) as the entrepreneur was proven whereby the profits received much better rather than previous expeditions, besides there was no hanky-panky.

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