Abstract
The participatory modes of Islamic financingParticipatory modes of Islamic financing including Musharakah and Mudarabah are widely accepted as the ideal modes of financingIdeal modes of financing among the jurists of Islamic banking and financeJurists of Islamic banking and finance. However, paradoxically, these are not the most popular modes of financing in practiceModes of financing in practice. This is because the practice of the participatory financing in Islamic bankingPractice of the participatory financing in Islamic banking is constrained by several factors. Therefore, Islamic banksIslamic banking apply the adapted variants of Musharakah throughout the world. This chapter explores the prevailing variants of participatory financingParticipatory finance in the major Islamic bankingIslamic banking industries around the globe. The design and structure of two major variants of Musharakah are explored in detail including diminishing MusharakahDiminishing (DM) and running MusharakahRunning (RM). Moreover, it elaborates the domains of participatory financingParticipatory finance in the major Islamic bankingIslamic banking hubs. Several applications of participatory financingApplicationof participatory financing are covered including working capital financingWorking capital financing (WCF), consumer financingConsumer Financing (CF), commodity operations financingCommodity Operations Financing (COF), local trade financingLocal trade financing, import financingImport financing, and Mudarabah-based financing based financing.
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