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Crowdfunding and Islamic


Finance: A Good Match?
Tamer Taha and Inmaculada Macias

Introduction
This chapter wishes to explore the relationship between two
fast-growing industries: Islamic finance and crowdfunding. Institutions offering Islamic financial services have increased in number
and availability thanks to a growing demand by certain segments of
the worlds 1.3 billion Muslims for Shariah-compliant products.1
Meanwhile crowdfunding platforms are growing worldwide, thus
showing their viability to attract much-needed investment for businesses and entrepreneurs.
The chapter is divided into eight sections, including the present
introduction. The following two sections will present the two industries of crowdfunding and Islamic finance separately, in order to
proceed to the next section to explore their links and differences.
The fifth section will briefly introduce the current state of the crowdfunding industry in the Arab and Muslim world, while the sixth will
present the example of Yomken, a Shariah-friendly crowdfunding
platform. The following sections will explore the importance of
crowdfunding for Islamic banks, as well as develop an example of an
Islamic financial product based on crowdfunding. The final section
will comprise the conclusion.

Crowdfunding
Crowdfunding is a type of crowdsourcing, which can be defined as
a participative online activity in which an individual, institution,
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non-profit organization, or company proposes to a group of individuals


of varying knowledge, heterogeneity and number, via a flexible
open call, the voluntary undertaking of a task which entails mutual
benefit. The crowd participates by bringing work, money, knowledge
and/or experience.2 Crowdfunding is the application of this concept
to the collection of funds through small- to medium-size contributions from a crowd in order to finance a particular project or venture,
offering small businesses and entrepreneurs a chance at success.
Crowdfunding shares some characteristics with traditional
resource-pooling and social-networking phenomena,3 but has a novel
and defining characteristic: it involves a crowd of consumers who act
as investors, providing monetary support to others proposals and
expecting some payoffs either monetary or non-monetary.4 Each
campaign is set for a goal amount of money and a fixed number
of days. Typically, the most successful projects receive about 2540
per cent of their revenue from their first, second and third degree
of connections, which can include friends, family or acquaintances.
Once a project has gained some traction, unrelated consumers or
investors start to support campaigns they believe in.5
Successful service businesses that organize crowdfunding and act
as intermediaries are increasing,6 as banks have augmented interest
rates or pulled back from lending to consumers and small businesses.
Interestingly, lending supplied by a crowd has lower interest rates
than those offered at large retail banks or by credit cards. For lenders,
the platforms are viewed as investment opportunities, yielding them
more than bank deposit accounts.7 In 2012, crowdfunding platforms
raised a total of $2.7 billion, compared with $1.5 billion in 2011.
Although crowdfunding is growing worldwide, the United States and
Western Europe raised much more capital than platforms in other
regions.8
Massolution defines four categories of crowdfunding platforms
(CFPs): equity-based, lending-based, donation-based and rewardbased crowdfunding.9 In equity-based crowdfunding, funders receive
compensation in the form of fundraisers equity-based or revenue,
or profit-share arrangements. Whereas in lending-based crowdfunding, funders receive fixed periodic income and expect repayment of
the original principal investment. In donation-based crowdfunding,
funders donate to causes that they want to support, with no expected
compensation. Finally, in reward-based crowdfunding, the funders
primary objective for funding is to gain a non-financial reward. Thus,

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115

equity-based and lending-based crowdfunding do crowdfunding for


financial return, while donation-based and reward-based crowdfunding
are used for campaigns that appeal to funders personal beliefs and
passions. Most crowdfunding platforms generate revenue by charging a percentage commission on funds paid out to fundraisers. This
commission is typically calculated from the total funds raised, and/or
based on achieving a fully-funded goal. In addition, crowdfunding
platforms can adopt two funding options, All or Nothing or Keep
it All. In the former, pledged money is only collected if the fundraising goal is met, otherwise the money is returned. In the latter, the
funds are collected whether the project goal is met or not.

Islamic Finance
Islamic finance describes the sector of finance which follows the
rules of Shariah, the Islamic law, based on the Quran and the Sunna.
Shariah has identified interest (riba), uncertainty (gharar) and
gambling (maysir) as elements which are to be avoided in business
transactions. Following these prohibitions, Islamic banking is defined
by a set of rules: interest is forbidden, uncertainty in contractual
terms and conditions is not allowed, investment in certain economic
activities is banned (including pork, alcohol, tobacco and weapons
production, gambling and adult entertainment), the rewards and
risks of the economic activities have to be shared by all parties
involved, and every financial transaction must be backed by a tangible asset.10 According to Islamic law, money should be used in a
productive way. In this context, profit-making is not prohibited, but
conceptualized as just reward.
A distinctive feature of Islamic banking is its focus on developmental
and social goals, as it promises to benefit local communities and provide financial inclusion to those people who had been self-excluded
from the financial system for religious reasons.11 Islamic financial
institutions are expected to promote job creation and promising
economic sectors, stimulate entrepreneurship, promote social justice
and equality and the alleviation of poverty.12 Furthermore, banks
can contribute to, as well as manage, zakah (mandatory almsgiving)
funds for charitable and social purposes.
We can generally observe a unanimous agreement among Islamic
economists on the fact that Islamic banking operations should be
based on the profit-and-loss sharing (PLS) principle instead of on the

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basis of interest.13 It is believed that PLS, or partnership finance, with


its focus on cash-poor promising entrepreneurs has more economic
potential than conventional, collateral-based lending, which favors
established businesses.14 PLS can be applied through either mudaraba
or musharaka. Mudaraba is partnership financing where the bank
provides finance and the entrepreneur or business manager their
time and effort. Profits are shared, but the bank is responsible for
any losses. Musharaka represents a type of joint venture, where all
investors share in both profits and losses.
In practice, Islamic banks currently allocate less than 10 per cent
of their credit facilities to these distinctively Islamic profit-sharing
instruments. For this reason, existing Islamic financial institutions
are criticized for deviating from an Islamic ideal of venture capitalism.15 However, a banks ability to increase their PLS portfolio is
limited by the challenges they face. These include the legal framework, risk management measures, and additional administrative and
monitoring costs, which results in most Islamic finance products
mimicking conventional products.

Links and Differences between Crowdfunding and


Islamic Finance
Islamic banking assets had an average annual growth rate of 19 per
cent over the past four years, growing 50 per cent faster than the
overall banking sector,16 while the global crowdfunding markets
have accelerated from an annual growth rate of 64 per cent in 2011
to a growth rate of 81 per cent in 2012.17 In light of these impressive growths, finding the links between both industries can lead to
new developments such as the emergence of Islamic crowdfunding
platforms and the use of crowdfunding to develop new products for
Islamic banks.
Islamic finance and crowdfunding both conceptualize customers
as investors and can potentially provide investment opportunities
with higher returns. Interestingly, as most crowdfunding platforms charge a percentage commission on funds paid out to fundraisers, they are already applying a PLS formula. In addition, they both
place a strong emphasis on transparency, mutual involvement and
trust. The PLS formula of Islamic finance can be equated with the
category of equity-based crowdfunding and the use of zakah with

Crowdfunding and Islamic Finance: A Good Match?

117

donation-based crowdfunding. Reward-based crowdfunding, while


having no parallels in Islamic finance, does not challenge its principles, as money is exchanged for non-financial rewards. On the other
hand, lending-based crowdfunding would need to be interest-free in
order to be Shariah-compliant.
Following the commonalities of Islamic finance and crowdfunding, what would Islamic crowdfunding look like? Looking at the
principles of Islamic finance, crowdfunding can be conceptualized as
Islamic if it invests in halal socially responsible products,18 shares
the risks of the investment, and it is characterized by the absence of
an interest-rate agreed prior to the investment. While most crowdfunding types fit into these norms, lending-based crowdfunding
would need to be adapted. A question remains whether Shariah
Boards are necessary in this context, as the amount and size of the
projects might make their existence not viable.
While Islamic finance and crowdfunding present common
features, they also show some divergences. Aside from the allowance
of interest rates in crowdfunding platforms, perhaps the most significant difference is the fact that PLS is ideally defined to finance longterm projects, while the typical crowdfunding projects are usually
short-term.

Crowdfunding in the Arab and Muslim World


Although crowdfunding is still a new concept in the finance industry, the Arab region and expatriate Muslim communities were some
of the pioneers to import this concept from the US, which accounts
for 60 per cent of the total funds raised through crowdfunding to
their local regions.19
In the Arab world, the first crowdfunding platform to be launched
was Aflamnah (Dubai, July 2012), followed by Yoofers (Beirut,
August 2012), Yomken (Cairo, October 2012), Shekra (Cairo,
November 2012), Eureeca (Registered in Grand Cayman Islands,
2011) and Zoomaal (Beirut, July 2013). Presently, there are around
ten platforms that focus and cover part of, or the whole, Arab
world. On a broader perspective, the Muslim world has witnessed
a couple of initiatives for crowdfunding targeting Muslim communities abroad: Halalfunder.com (London, October 2012) and
Islamica.co.za (Durban, 2013). However, the development stage

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of these platforms is relatively divergent. While some platforms


are functioning (such as Yomken, Zoomaal, Eureeca and Shekra),
others are still under development (such as Flousi, Mawwell and
Mawelni), and some others were launched but unsuccessful (such as
NefsiMasr and Yoofers). These crowdfunding platforms face many
challenges. These include the market size, either from a projects
supply side or a demand side of funds, the awareness of the concept,
new in this region, and the legal and financial framework. So far,
there is no comprehensive cross-countries legal framework to adopt
crowdfunding as a source to fund young entrepreneurs. Despite all
these challenges, the entrepreneurs behind these platforms believe in
the present and future potential of crowdfunding.

Islamic Crowdfunding: Yomken20


The Cairo-based crowdfunding platform Yomken.com has a special
and unique model compared to other non-profit platforms both in
the Middle East21 and the rest of the world.22 In addition to being
run as a non-profit project, it is one of the very few platforms
that leverage the power of the crowd from two sources: the funds,
through crowdfunding, and knowledge donation, through its
open-innovation component.
Yomken is not accredited as an Islamic financial institution and
it does not label itself as Islamic. However, it is considered a
Shariah-friendly platform, since it follows the PLS concept and does
not charge any interest rate. In addition, the products offered in the
platform must have a social impact, and projects with any potential
prohibition in Islam are not accepted (such as alcohol, projects harmful to the environment or human health, obscene entertainment).
Yomken offers two main services:
1. An open-innovation platform for low-tech small- and mediumsized enterprises (SMEs) or non-governmental organizations (NGOs)
working with them to post the challenges they face (publicly or
anonymously) and link them to creative solutions provided by the
wisdom of the crowd. These challenges can vary from product
development, to production process optimization, or usage of alternative raw material. This matchmaking process is fully compliant
with the standards of transparency and intellectual rights protection, as described in the platforms Terms and Conditions.

Crowdfunding and Islamic Finance: A Good Match?

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2. Crowdfunding for innovative products (either resulted from the


previous step or not) works through a system of pre-payment
managed by Yomken.com. Buyers pre-pay for products from their
e-wallets,23 and if the targeted amount (including the production
costs and profit) is pledged, both the workshop owner and the
innovator together initiate production. Funders can track the use
of their contribution during the production process and even
the social impact the project has had during and after the production is completed (recruiting more workers, increasing the income
of the workshop owner, and so on).
Yomken.com tries to bring-up innovative Arab products to the
market in order to compete locally and internationally. It does so by
moving up the value chain of the products fabricated by micro and
small entrepreneurs working in the low-tech sector (such as metal
products, mechanical and electrical products, glass products, clothing and textiles and leather, plastic, wooden products and toys) and
providing young entrepreneurs with an innovative financial solution
for their challenges.
The platform is run by Istebdaa, LLC.24 So far, in less than a year,
the platform has opened the door to more than 20 entrepreneurs to
find their way either to solve important technical challenges they
have faced during the production process or to fund their innovation. On average, one in three products is successfully funded and
one in two challenges are successfully solved. The average amount
needed per project is less than $200, which further encourages the
funders to support the entrepreneurs. In return for their contribution,
the funders get the innovative product itself, so their investment
cannot be considered a one-way donation. This encourages SMEs to
increase their production of the innovation and to get to explore
the market. The platform is currently working on expanding its
reach from Egypt to the regional level, keeping its focus on low-tech
innovations.

Crowdfunding for Islamic Banks


Islamic finance has not been able to cope with the fast changes in the
global economy, where services, instead of industry and agriculture,
has dominated the sector, and where innovation and human productivity, instead of capital, land and human resources, have become a

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major growth factor. As proven by many analysts and economists,


the innovation levels in Islamic finance are very low compared
to the scale and growth of the industry itself.25 Therefore, Islamic
finance still has a long road ahead in order to develop innovative and
Shariah-compliant financial products instead of Islamizing conventional banking contracts.26
In this context, Islamic crowdfunding comes as a new trend and
a niche financial solution that could respond to the needs of both
Muslim and non-Muslim innovative entrepreneurs, who might not
have the needed guarantees and collaterals, but rather the trust
bond with their funders is built based on other factors such as: their
intangible assets (such as skills, idea, patent, creativity), which are
difficult to use to calculate their value with the traditional methods.
Additionally, word of mouth and the humanistic direct interaction
with the entrepreneur play a major role in building the needed trust
during the crowdfunding campaign.
Usually, creative entrepreneurs face severe burdens imposed by
banks, which tend to prefer to lend out to companies and projects
with an established record. Thus, gaining access to financial support
for start-ups and youth-run companies is not an easy task, despite
their high-growth potential. In addition there are an alarmingly
insufficient number of venture capitals in the Arab world compared
to the amount of the demand.27
In this context, Islamic banks have the opportunity to play a fundamental role in paving the road for crowdfunding to fill the gaps in
the financial industry. Islamic banks, in partnership with Shariahfriendly crowdfunding platforms, can come up with new practical
and low-cost financial products. These could open up new market
segments for both the Islamic finance and the crowdfunding industries and will increase the size and effectiveness of Islamic financial
tools targeted towards high-growth potential projects.

Istebdaa: A Suggested Shariah-Compliant


Crowdsourced Product for Islamic Banks
Following Yomkens model, Islamic banks can leverage a new Islamic
financial product based on crowdfunding. This financial tool comes
as a mix of two already existing Islamic products: musharaka28 and bai
salam29 (advanced payment), and crowdfunding. For simplification

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121

purposes, the authors have chosen the name istebdaa


for
this product, which means the demand of innovation in Arabic.
The idea behind istebdaa is to provide an innovative financial
tool for new and creative projects which are generally not funded
by banks as they are considered to be too risky. This product aims to
lower the overall risk on the different innovation partners innovation supplier, innovation demander and the bank since it is based
on both the diminishing partnership used in Islamic microfinance
(a.k.a. musharka mutanaqessa30) and the crowdsourcing models of
open-innovation and crowdfunding. The idea is very similar to
what is currently used in Yomken.com, but with some tweaking to
allow its usability on a broader scale and with higher investment
projects.
By combining bai salam and musharaka, the istebdaa contract is
conducted between the innovation owner, the innovation customer(s)
and the bank. The innovation owner will firstly need to conduct
the necessary testing under a well-defined quality control procedure
established by the bank. Once the idea and the prototype prove
their success, and before manufacturing on a large scale, the innovation owner will post a prototype on the crowdfunding platform,
in order to attract interested customers to pre-order the innovation
online under a normal bai salam contract. The customers can vary
from normal individuals to big multinational companies, or even
the government, and they are all sharing the risk with the bank and
with the innovation owners. Any contributor will be able to track his
or her orders in different projects. The idea of including the direct
customers in the formula will reduce the market risk on all of the
entities, notably the bank, because there will be a guarantee that any
investment in this innovation would have a demand and, therefore,
financial returns.
Before posting the project for crowdfunding, the banks role will be
to provide the innovation owner with non-financial support, which
includes identifying the target market, testing procedures and business planning. Once the goal amount (if any) is reached, the fixed
production costs will be borne by the bank through a musharaka
contract. When the prototype is ready to be posted on the crowdfunding platform, the bank will guarantee the innovation owner the
needed funds to respond to the customers orders. Such investment
can cover the fixed costs of the first orders and the kick-off capital.

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Income and Ownership for


the Firm and the Inventor
50%

50%
+ 10%

60%
+ 10%

50%
40%

30%

Bu
y
Sh -Bac
are k
s

Income and Ownership for


lstebdaa
0

3
Months

Figure 6.1 Income and ownership for the firm and the inventor

In return, the bank will have an equity share of the project that
will diminish exactly like the basis of the diminishing musharaka.31
Thus, profits from each project are shared between the bank and the
innovation owner. The latter gradually buys back the banks shares in
the project within a predetermined timeline and with a grace period
till the commercialization (Figure 6.1).
The added value of such a financial tool is that it will provide a
virtual channel to market and fund new, innovative projects. The
istebdaa contract enables entrepreneurs to develop their ideas
into products with the alternative and Shariah-compliant finance
method of crowdfunding. In addition, it also encourages, on the
one hand, young students, researchers and potential entrepreneurs
to come up with their own projects; and on the other, it provides a
pool of innovative projects that are highly needed in the Arab and
Muslim world to increase the overall welfare of the society.

Conclusion
This chapter has provided definitions of both crowdfunding and
Islamic finance, as well as explored their links and differences. With

Crowdfunding and Islamic Finance: A Good Match?

123

a special focus on the Arab and Muslim world, the chapter has
introduced the recent developments regarding crowdfunding in this
region, in order to explore the example of Yomken, a Shariah-friendly
crowdfunding platform. This example has provided the ground to
explore the importance of crowdfunding for Islamic banks, as it
can help develop new Islamic financial products. In this regard, the
authors have provided an example of such potential products, based
on the combination of existing Islamic finance contracts and crowdfunding, which need to be further explored by different scholars,
given their high impact on society.
Islamic finance, ideally, is an alternative way of financing based
on ethical and socially responsible standards, which ensures fair distribution of benefits and obligations between all the parties in any
financial transaction. Crowdfunding carries these characteristics and
provides the ground for new developments in the field, as it can use
Islamic finance as a tool to promote financing and development.
Given the challenges faced by Islamic banks in their application of
PLS principles, the development of both Islamic crowdfunding platforms, and new Islamic financial products based on crowdfunding,
provide the ground for an increase in partnership finance.
The area of venture capital is largely underdeveloped in Islamic
finance, which is actually where its essence lies: in partnership and
risk-sharing. Investors in the Middle East and North Africa (MENA)
region tend to be risk-averse and short-term oriented,32 and the
entrepreneurial ecosystem is largely underdeveloped. Thus, there is
a funding gap within the Islamic finance market that crowdfunding
could exploit. In this context, the use of Shariah-compliant crowdfunding not only means the further development of Islamic finance,
but also its connection to entrepreneurship, job creation and, ultimately, economic development.

Notes
1. Said M. Elfakhani, Imad J. Zbib and Zafar U. Ahmed (2007) Marketing
of Islamic Financial Products, in M. Kabir Hassan and Mervyn K. Lewis
(eds) (2007) Handbook of Islamic Banking (Cheltenham: Edward Elgar)
p. 116.
2. Enrique Estells-Arolas and Fernando Gonzlez-Ladrn-De-Guevara
(2012) Towards an Integrated Crowdsourcing Definition, Journal of
Information Science, 38(2) pp. 910.

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3. A. Ordanini, L. Miceli, M. Pizzetti and A. Parasuraman (2011) Crowdfunding: Transforming Customers into Investors through Innovative
Service Platforms, Journal of Service Management, 22(4) p. 448.
4. Ibid., p. 457.
5. Tanya Prive (2012) What Is Crowdfunding and How Does it Benefit
the Economy, Forbes, 27 November 2012, http://www.forbes.com/sites/
tanyaprive/2012/11/27/what-is-crowdfunding-and-how-does-it-benefitthe-economy/.
6. Ordanini et al., Crowd-funding, p. 445.
7. Helen Avery (2012) Crowdfunding: John Mack Backs Non-bank with
Board Role, Euromoney, 4 December 2012, http://www.euromoney.com/
Article/3010184/Crowdfunding-John-Mack-backs-non-bank-with-boardrole.html.
8. Massolution (2013) 2013 CF The Crowdfunding Industry Report,
http://www.crowdsourcing.org/editorial/2013cf-the-crowdfundingindustry-report/25107?utm_source=website&utm_medium=text&utm_
content=LP+bottom&utm_campaign=2013CF+Launch.
9. Massolution (2012) Crowdfunding Industry Report: Market Trends,
Composition and Crowdfunding Platforms, May 2012, pp. 1925,
http://www.crowdsourcing.org/document/crowdfunding-industryreport-abridged-version-market-trends-composition-and-crowdfundingplatforms/14277.
10. Stefan Volk and Markus Pudelko (2010) Challenges and Opportunities
for Islamic Retail Banking in the European Context: Lessons to Be
Learnt from a BritishGerman Comparison, Journal of Financial Services
Marketing, 15(3) pp. 1923.
11. Ibrahim Warde (2004) Global Politics, Islamic Finance and Islamist
Politics Before and After 11 September 2001, in Clement M. Henry and
Rodney Wilson (eds) The Politics of Islamic Finance (Edinburgh: Edinburgh
University Press) p. 40.
12. lbid. p. 1745.
13. Ahmed A. Fattah El-Ashker and Rodney Wilson (2006) Islamic Economics:
A Short History, vol. 3, Themes in Islamic Studies (Leiden: Brill) p. 367.
14. Warde (2004) Global Politics, Islamic Finance and Islamist Politics, p. 40.
15. Clement M. Henry and Rodney Wilson (2004) Introduction, in
Clement M. Henry and Rodney Wilson (eds)The Politics of Islamic Finance
(Edinburgh: Edinburgh University Press) p. 3.
16. Ernst & Young(2012) Growing Beyond: DNA of Successful Transformation,
World Islamic Banking Competitiveness Report 2012-2013 (The World
Islamic Banking Conference, December 2012) p. 4.
17. Massolution (2013) 2013 CF The Crowdfunding Industry Report.
18. Permissible under Islamic law.
19. Massolution (2013) 2013 CF The Crowdfunding Industry Report.
20. Yomken in Arabic means It is possible. Source: http://yomken.com/
about-us/.
21. Ralf Hooijschuur, Crowdfunding Arab/Middle East: Crowdsourcing
Platforms To Choose From, http://www.projects2crowdfund.com/crowdfunding-arab/.

Crowdfunding and Islamic Finance: A Good Match?

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22. Anton Root (2012) Egypts Yomken Brings Open Innovation,


Crowdfunding Under One Roof, 12 November, http://www.crowdsourcing.org/editorial/egypts-yomken-brings-open-innovation-crowdfundingunder-one-roof/21380.
23. A digital wallet (also known as an e-wallet) allows users to store digital
cash to use in paying for transactions on the Internet.
24. Limited Liability Company.
25. Fouad H. Al-Salem (2009) Islamic Financial Product Innovation,
International Journal of Islamic and Middle Eastern Finance and Management,
2(3), pp. 187200.
26. Shafiel A. Karim (2010) The Islamic Moral Economy: A Study of Islamic
Money and Financial Instruments (Boca Raton, FL: Brown Walker Press).
27. World Bank (2013) Transforming Arab Economies: Traveling the
Knowledge and Innovation Road, prepared by the CMI (Center for
Mediterranean Integration) with the World Bank, EIB (European
Investment Bank), and ISESCO (Washington, DC: World Bank).
28. A joint partnership structure with profit-and-loss sharing implications
that allows each party involved in a business to share in the profits and
risks. Instead of charging interest as a creditor, the financier will achieve
a return in the form of a portion of the actual profits earned, according to
a predetermined ratio. All providers of capital are entitled to participate
in management, but not necessarily required to do so.
29. Bai salammeans a contract in which advance payment is made for goods
to be delivered later on. The seller undertakes to supply some specific
goods to the buyer at a future date in exchange of an advance price fully
paid at the time of contract. It is necessary that the quality of the commodity intended to be purchased is fully specified, leaving no ambiguity
that could lead to dispute. The objects of this sale are goods and cannot
be gold, silver or currencies. Barring this, bai salam covers almost everything which is capable of being definitely described as to quantity, quality and workmanship.
30. A declining partnership structure involving share buyback over a period
of time. Source: F. Muhamad, A. Abd Rahman and K. Khalid (2013) An
Evaluation on Musharakah Mutanaqisah Based House Financiing by
Islamic Banks in Malaysia, Proceeding of the International Conference
on Social Science Research, ICSSR 2013 (e-ISBN 978-967-11768-1-8).
45 June 2013, Penang, MALAYSIA. Paper accessed through http://
worldconferences.net/proceedings/icssr2013/toc/294%20-%20Siti%
20Fariha%20-%20AN%20EVALUATION%20ON%20MUSHARAKAH%20
MUTANAQISAH%20BASED%20HOUSE%20FINANCING%20BY%
20ISLAMIC%20BANKS%20IN%20MALAYSIA_done.pdf.
31. Diminishing musharaka is just a musharaka with an additional feature of
decreasing ownership of one party. This differs from normal musharaka,
where the ownership ratio does not change. The closest term in conventional finance is redeemable capital.
32. Anton Root (2013) Shekra Blends Crowdfunding with Islamic Finance,
www.crowdsourcing.org, 22 March 2013, http://www.crowdsourcing.org/
editorial/shekra-blends-crowdfunding-with-islamic-finance/24733.

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