| Abstract |
Mudarabah financing is one of the two
types of financing in equity
participation. Under this concept the
financier will supply the capital
while the entrepreneur will run the
business venture. Any profit will be
shared between both parties while any
loses will be borne by the financier.
Due to financial constraint, young
entrepreneur might have difficulty to
raise capital. Furthermore utilizing
loans from the Islamic bank is subject
to bank stringent regulation, while to
use conventional bank is utilizing the
concept of riba which is prohibited in
Islam. Using the mudarabah concept,
every fabric of the society will be
able to progress without creating loan
as well as riba. The financier will be
able to use his surplus cash to
finance profitable business. As for
the young entrepreneur, the need for
collateral is not necessary to finance
business, but it will encourage hard
work and integrity. As for the
society, it will provide job
opportunities in the expansion of new
enterprise. Hence, it will encourage
brotherhood spirit among the Muslim
communities. Utilizing this concept,
it will create new types of business
expansion almost similar to the
franchising concept. |