Arabic for gambling. One of three fundamental prohibitions in Islamic finance (the other two being riba and gharar). The prohibition on maysir is often used as the grounds for criticism of conventional financial practices such as speculation, conventional insurance and derivatives.
Medical and Health Takaful
A contract that provides specified medical treatment benefits such as the cost ofhospitalisation, surgical and physician consultation fees against risks of a person being diagnosed with certain illnesses or having injury arising from an accident.
A statistical table showing the death rate at each age, usually expressed as the number of deaths per thousand.
A Mudarabah is an Investment partnership, whereby the investor (the Rab ul Mal) provides capital to another party/entrepreneur (the Mudarib) in order to undertake a business/investment activity. While profits are shared on a preagreed ratio, loss of investment is born by the investor only. The mudarib loses its share of the expected income.
Mudaraba Based Contract
A Takaful Contract based on the principle of Mudaraba.
A Murabaha is a purchase and resale transaction. Instead of lending money, the capital provider purchases the desired commodity from a third party and resells it at a predetermined higher price to the commodity user. By paying this higher price over installments, the commodity user has effectively obtained credit without paying interest.
A Musharaka is a partnership financing structure where profits are shared as per an agreed ratio whereas the losses are shared in proportion to the capital/investment of each partner. In a Musharaka, all partners to a transaction contribute funds and have the right, but not the obligation, to exercise executive powers in that project, which is similar to a conventional partnership structure and the holding of voting stock in a limited company. This equity financing arrangement is widely regarded as the purest form of Islamic financing.