28.3.1 INVESTMENT IN PROPERTY
Partnership, sharikat, is in general allowed. People can jointly own and use articles such as food.
They can buy property such as a house jointly and sell it later for profit. The partner in a joint property has the right
of pre-emption, shuf'at and must be informed before any sale of the joint property is done.
28.3.2 INVESTMENT IN TRADE
Business partnerships, musharakat, can take several forms:
pooling of capital, sharikat al amwaal; pooling of human resources, sharikat al abdaan; pooling of goodwill or contacts, sharikat
al wujuuh, or any combination of the above. Murabahat is pooling of capital that is invested. The partners agree to
a fixed proportion of profits or losses. It is illegal to fix a certain amount as the profit due to a partner because that
would constitute riba. Mudharabat involves pooling of capital and human resources
and is co-operation between the owner of capital, the worker and the manager. Mudharabat can be by merchandise and not money.
There is a pre-fixed proportion of sharing losses and profits. In case of loss, outstanding liabilities are deducted from
the remaining capital and the worker just suffers loss of time.
28.3.3 INVESTMENT IN AGRICULTURE
The owner of the land may work it himself. He can use hired labour who are paid wages and have no share
in the produce. The landowner may let a farmer cultivate unused land for free or in return for a fixed rental, ijaarat al
aradh. The farmer is entitled to all the produce of the land. The Law allows sharecropping, muzara'at. The landowner and the
farmer agree to share the produce according to agreed formula. The formula must state a proportion of the produce. It is haraam
to fix each partner's share by weight. The landowner may contribute agricultural inputs like seeds and fertilizers. Sharecropping
was agreed between the prophet and the Yahuud at Khaybar. Mukhabarat, a form of
gambling that is letting a farmer use land in return for the produce of a delineated portion of the land, is forbidden
because it will be a source of dispute when the delineated plot does not produce well.
28.3.4 DEPOSITS & TRUSTS, wadii'at
The trustee does not pay if the trust is destroyed accidentally. He pays for depreciation due to his
use of the property. The concept of wadii'at has been employed in modern Islamic banking schemes.
Insurance can take two forms: proprietary or mutual. The proprietary form is the un-Islamic form found
in non-Muslim society. It is insuring a risk that is a type of gambling and involves cheating because any member who pulls
out or fails to keep up the premium payments automatically loses all contrinbutions made over many years. In mutual insurance,
the members are insurers and insured at the same time. It is a natural extension of the mutual support, takaful, that is found
in the Muslim community. Thus Islamically-sanctioned insurance is a joint investment. Funds contributed as premiums are invested
in mudharabat ventures. Each member has two accounts: a personal account and an account in which are placed funds used for
pay-outs to the families of those who die early. Islamic financial institutions have developed an Islamically-acceptable insurance
scheme called takaful.