All terms
Glossary
Ra's al-mal
Investment capital
The capital contributed by the investor in a Mudarabah — the principal that is put at risk in the venture.
Ra's al-mal is the capital the rabb-ul-mal commits to the venture. It is genuinely at risk: the investor may lose some or all of it if the venture performs poorly.
Returns are calculated as a share of realized profit on top of the capital — not as a guaranteed yield on the capital itself.
Related terms
Run your first deal, free.
Model it, agree it, sign it, fund it — end to end, in one place.