Ancient wisdom, modern method: explaining the vocabulary of Islamic financial transactions (Special advertising section)

While the names of Islamic financial practices are not well-known in the West, the ideas behind Islamic finance tools are not so complex. Murabahas are commercial finance set-ups. In this most common Islamic arrangement, the lender purchases something, takes possession of it, and sells it later to the borrower for a profit. The lender has taken the risk of the goods' devaluation. Ijara transactions are leasing and hire-purchase deals. Muzara`as are agricultural arrangements where the farmer supplies land and labor and the financier contributes funds to be used for equipment and for seeds. Musaqat financing is another type of agricultural arrangement. These deals relate to land in particular. A possible example of a musaqat transaction is one related to irrigation. Two sorts of equity arrangements are mudaraba and musharaka. In a mudaraba, one party contributes funds and another gives labor and skill. The profits of the venture are split, and in the event of a loss the inves