Considerations for Implementing Musharakah in Microfinance b
From HodHood
Contents
Top 20 FREQUENT WORDS
musharakah 10 profits 7 ratio 7 shirkat 7 cash 6 accounting 5 basis 5 daily 5 amount 4 partner 4 partners 4 techniques 4 arrangements 3 based 3 business 3 closing 3 commercial 3 distributed 3 distribution 3 estimated 3 ethics 3 inventory 3 investment 3 losses 3 moral 3 movement 3 obtain 3 opening 3 participants 3 required 3
DOCUMENT KEY POINTS
- shirkat ul aqd i types if shirkat ul amwal a all participants invest some amount of capital in a commercial enterprise
- if shirkat ul wujooh a no investment required commodities purchased on deferred payment basis and sold at spot
- losses i losses must be shared in the ratio of capital invested unlike profits where ratio may be greed upon
- i normal principle is that every partner has a right to take part in management
- termination i musharakah shall be terminated as follows i by giving notice to all other partners
- i capital may be valued at the beginning and end of period and profits distributed in agreed ratio
- i sleeping partners share cannot be more than his proportion of investment
- ethics and morals i challenges cont if regulatory issues pursuit of default cases is time consuming and costly
- if cash based economy no verification or recording of transactions through the banking channels
- knowledge of the business i obtain understanding of the different sectors by conducting sector studies and market research
- i obtain historical perspective of level of earnings of the musharakah participants
- accounting techniques i activity based estimation in absence of detailed accounting systems and records
- i business operations are generally entirely cash based with low capital requirement
- daily movement of inventory i a simple form designed to show opening and closing inventory together with movement on a daily basis
- i form should include sale and purchase prices i banks obtain copy of form daily and conduct surprise physical counts periodically
- i sales can be estimated by adjusting for opening and closing inventory
- payment for carriage i amount paid will indicate number of trips made
- cash reconciliation i reconcile movement of cash to opening and closing balances on a daily basis
- i a simple form can be designed and used daily to summarize cash movements
- remarks i the entity should examine problems currently being faced in microfinance as the type of customer and creditworthiness are likely to be same
- i similar conditions may prevail under musharakah arrangements and may require similar solutions
- remarks cont i the ability of businesses to meet financial obligations under musharakah arrangements is enhanced as partner owner is required to share in profits earned
- i as this is more attractive to businesses banks are likely to build large musharakah portfolios in a short time
Please note, This is an auto generated summary based on sentances position in the document and other factors
DOCUMENT WORD ANALYSIS
Main Category
- AlHuda Material\islamic micro
KeyWords
islam finance bankable contract client profit purchase financial asset microfin risk sale transact price murabahah busi sharia goodasset payment invest
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DOCUMENT REFERENCES
Number of Pages
21
Published Date
2016-09-17 00:47:11
