English Abstract
Abstract:
Objective: This study aims to demonstrate the challenges associated with
implementing the contract of participation in Islamic banks in the Kingdom of Bahrain
and explore the extent to which the contract of participation and Islamic banks achieved
the purposes of Maqasid al-Shariah. The study also presents the applications of the
engagement contract in Pakistan and Oman.
Methods: Using qualitative research, 10 Islamic Shariah experts, including Islamic
bankers who have served in their bank for more than 15 years, were interviewed. Risk
professionals with sufficient knowledge of the meaning and structure of the
participatory contract were also interviewed. NVIVO software was used to analyze the
data collected.
Findings: The results of the study showed that the reasons for the rarity of Musharaka
financing were the difficulty of implementing monitoring and its higher risks compared
to other contracts, laws, and regulations. There was also a lack of awareness among
staff and individuals of Musharaka financing. Results showed that the partnership
contract based on the principles of profit and loss sharing achieves the purpose of
Maqasid al Shariah more than other contracts.
Implications: The study contributes to understanding the constraints that have led to
the restricted use of Musharaka financing in Islamic banks in the Kingdom of Bahrain.
The findings of the thesis also assist finance decision-makers and policymakers.
Keywords: Islamic Banks, Musharaka, diminishing Musharaka, Maqasid al Shari'ah,
Challenges of Musharaka.
