Mush'arakah in constructing housing flats

Abstract EN

Mush¯arakah financing is Shar¯i‘ah based equity financing, which is rarely utilised in the banking practices due to multiple risk exposures in partnership based ventures.

This case article pertains to mush¯arakah project financing by a bank in Pakistan to highlight di erent types of risks associated with implementation of mush¯arakah based financing in the industry.

The approach adopted in this research study is narrative based where di erent steps for the implementation of mush¯arakah financing including associated risks and issues are highlighted in terms of compliance with Shar¯i‘ah, particularly in the context of using mush¯arakah in the construction of residential flats.