英语论文网

sitive. Consequently compared to Mudharabah, revenue sharing provides returns to investors even when the operator/management is loosing. An element that reduces the need to worry about investors’ return or to seek approaches to guarantee returns that may be dubious from Shari’ah point of view such as issuing debt-based tradable Sukuk. On the other hand, revenue sharing arrangements do not provide protection against variations in the return of the investors so it is still classified in the area pf sharing tools like Mudharabah and Musharakah. Stability of projects and strength of their feasibility studies will be crucial for assuring smaller variations in return.

 

However, similar to Mudharabah and Musharakah, revenue sharing arrangements can be supplemented by either one of the two following structures or by both of them together: 1) a condition that imposes a cap on the net profit of the operator/management or on the return to investors whereby surpluses above the cap are either rendered to the other party or scaled at different proportion; and, 2) creating a fund, contributed to by deductions from investors’ distributions and any concerned third party, for equalizing the investor’s return over distribution periods.

 

Service and usufruct-based finance

 

In an economy of ever increasing inflation and rising cost of labor (improving level of living), service and usufruct based financing and Sukuk provide a good shelter against erosion of returns. The reason is: payment of returns is in kind, i.e., in terms of either service units or units of usufructs. This is another Shari’ah compatible hedge against inflation without resorting to doubtful vehicles that may involve a form or another of indirect interest.

 

Principal insurance and collaterals

 

The Shari’ah rule on collateral taking is well known. It applies to debts. This means that any debt-creating finance or debt-representing Sukuk may be supported by collaterals. Collaterals provide a tool to guarantee not only the debt

 

of a principal but also the debt of rentals as well as the in-kind debt of services and usufructs. Consequently, while services and usufruct financing hedge against inflation they can also be supported by collaterals that guarantee, in fact, both principal and return. This is simply because services and usufructs financing are based on the sale contract.

 

Third party guarantee: deposit guarantee

 

Third party guarantee can be offered by any entity/person that has interest in the financing without being a party to it. It may cover the principal as well as athe return. For instance a government, based on its own resources may offer a third party guarantee for financier w本论文由英语论文网提供整理，提供论文代写，英语论文代写，代写论文，代写英语论文，代写留学生论文，代写英文论文，留学生论文代写相关核心关键词搜索。