Mudarabah
A partnership, not a loan. Investors provide capital, startups provide the work, and both share the outcome — profit or loss — fairly.
What is Mudarabah?
A partnership, not a loan: one side brings capital, the other brings the work, and profit is split by an agreed ratio. If the venture loses money, the investor bears the loss — not the entrepreneur, unless they were negligent.
No interest, ever
Returns rise and fall with real business performance — never fixed.
Loss sits with capital
The investor risks their capital; the startup risks its time — not a debt.
Ratio, not amount
Founders and investors agree a ratio (e.g. 70/30) upfront — never a fixed return.
How Mudarabah differs from Qard Hasan
QardHasana already supports Qard Hasan, an interest-free loan. Mudarabah is a different contract with a different risk profile — here's how they compare.
| Qard Hasan | Mudarabah (new) | |
|---|---|---|
| Repayment | Fixed schedule, principal repaid in full | No fixed repayment — profit as earned |
| If the business struggles | Principal is still owed | Investor absorbs the loss; no debt created |
| Upside | None — only what was lent is returned | Shares in profit at the agreed ratio |
How it will work
Here's the journey, whether you're building a startup or backing one.
As a Startup
- 1
Build an investment profile
Submit your financials, proposed profit-sharing ratio, and funding target.
- 2
Get reviewed and listed
We review your offering, then list it publicly with a provisional score.
- 3
Receive funding
Once fully funded by investors, capital is disbursed to you.
- 4
Report and distribute profit
On your agreed cadence, declare profit and distribute each investor's share.
- 5
Build your track record
Reliable, fair distributions raise your Mudarabah Score over time.
As an Investor
- 1
Browse startups and scores
See listed startups, their proposed ratio, and Mudarabah Score.
- 2
Review the terms
Check the ratio, minimum investment, and distribution cadence.
- 3
Invest
Commit capital — funds are held until the offering is fully funded.
- 4
Receive your share — or share the loss
When the startup reports profit, you receive your pro-rata share.
- 5
Leave feedback
Rate your experience after each distribution — it feeds their score.
The Mudarabah Score
Mudarabah involves real investment risk, so its score is built from three signals:
Distribution reliability
Did the startup report and distribute profit on schedule, consistently?
Financial transparency
Are reports submitted on time, with consistent disclosure?
Investor feedback
Ratings from investors who've received a distribution — would they invest again?
New offerings without a distribution history show a clearly-labeled provisional score.
Built on clear principles
Mutual consent
Both sides agree the ratio, amount, and use of funds before capital moves.
Transparency
Startups disclose founders, financials, and fund use before investors commit.
Shared, honest risk
No one guarantees a return the venture hasn't earned. Loss is possible and disclosed.
Understand the risk before you invest
Mudarabah is an investment, not a loan or a donation. Your capital is not guaranteed, is not insured, and can be lost if the underlying business performs poorly. Profit, if any, depends entirely on real business outcomes and is never fixed in advance. This page is educational and does not constitute financial, legal, or investment advice — please do your own research and, where appropriate, consult a qualified advisor before committing capital.
Frequently asked questions
Get ready for Mudarabah
Whether you're building something worth investing in, or looking to put capital to work the ethical way, tell us and we'll keep you posted as this launches.