Shariah structure
Mudarabah, modeled the way it’s meant to work.
Mizanvest enforces the structure of a Mudarabah in software: profit shared by a pre-agreed ratio, capital genuinely at risk, and the terms that Shariah fixes kept out of negotiation. We reference AAOIFI Shari’ah Standard No. 13 (Mudarabah), the recognized benchmark for the contract.
The contract
Two parties, one shared outcome.
A Mudarabah is a contract between a capital provider (rabb al-mal) and a manager (mudarib). The investor contributes capital; the manager contributes effort and management. The relationship is fiduciary — the manager holds the capital in trust, not as a borrower.
- Profit is shared according to a pre-agreed ratio, not a fixed amount.
- Financial losses are borne by the rabb al-mal, up to capital committed — except where caused by the manager's misconduct, negligence, or breach of terms.
- The manager earns a share of realized profit for effort, never a guaranteed fee on capital.
Profit-sharing ratio
Profit is split by this pre-agreed ratio on whatever profit is realized — not a fixed amount and not a percentage of capital. If the venture makes no profit, there is nothing to share.
The riba firewall
What the model enforces — and what it won’t let you write.
The difference between a Mudarabah and an interest-bearing loan is structural. The modeler keeps that structure intact.
Structured in
- Profit shared by ratio on realized profit
- Capital at risk; loss borne by the capital provider
- Manager liable for misconduct, negligence, or breach
- Shariah-fixed terms kept out of negotiation
Kept out
- A fixed or guaranteed profit amount to either party
- Profit quoted as a percentage of capital (a yield)
- Guaranteed or protected principal
- Any framing as a loan, lending, or interest
Capital at risk
Risk-sharing is the proof, not a footnote.
In a Mudarabah, the capital provider genuinely bears the downside. Capital is at risk and you may lose some or all of it; profit is not guaranteed and depends on the performance of the venture. Any indicative figure is a target, not a promise, and past performance does not indicate future results.
This is the same sentence that makes the structure authentically Shariah-compliant and keeps it honest under securities law. We don’t soften it.
The benchmark
Measured against AAOIFI Standard No. 13.
AAOIFI is the global standard-setter for Islamic finance, and its Shari’ah Standards are internationally recognized benchmarks. Mizanvest models Mudarabah structures in line with Shari’ah Standard No. 13 — an external yardstick, so the structure is measured against a published standard rather than our own assertion.
What Mizanvest is — and is not
Software, not a fatwa.
Mizanvest provides the technology to structure Mudarabah arrangements. It does not issue fatwa, certify any individual deal as Shariah-compliant, or make investment decisions — those remain with the parties and their own Shariah and legal advisers. We implement the structure; we don’t adjudicate it.
- Not a fund, broker-dealer, investment adviser, or custodian
- Not compensated based on capital raised — a flat software fee
- Does not hold investor funds or securities
- Parties are encouraged to obtain independent Shariah review of each deal
Structure a deal the way it should be.
Authentic Mudarabah mechanics, in software built for serious dealmakers.