What does Mudaraba mean in Islamic Finance?

Mudaraba is one of the most common products in Islamic financial institutions. In a Mudaraba contract, a financier provides capital to an entrepreneur who manages an economic activity such as property construction or real estate investment, a business, a joint venture or a capital market investment portfolio (Sukuk and/or Shares). When this economic activity returns a profit, both parties share the proceeds based on an agreed upon ratio; when a loss occurs, only the financier bears the financial loss. (The entrepreneur loses his/her effort and time). However, if the loss is due to the misconduct of the entrepreneur, then he must suffer the financial loss as well. 

Thank you for your invitation ............... person who provides capital to someone else do the work

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Thanks for the invitation, you have explained very well, I will some words in simple language. Mudarabah means a business contract in which one party bring capital and another party do effort to increase capital through Halal business like real estate, construction etc. Party who provides fund is called Rabul maal and the party who do efforts (entrepreneur) is called mudarib.

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