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Principal and Profit Guarantees in Mudarabah: Equivalence with Ribā and the Erosion of the Lawful–Unlawful Boundary
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Hassan Nezhadshir *   |
| Level 4 seminary, researcher at Baqir al-Uloom Research Institute, , professor at higher levels of seminary, university professor , dnezhadshir@gmail.com |
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Abstract: (27 Views) |
The mudarabah contract rests on the allocation of risk between the capital owner and the working partner. This descriptive-analytical study asks whether, when two stipulations are jointly accepted in a mudarabah contract, namely a *guarantee of principal* (*ḍamān*) and a *guarantee of a fixed profit* (*ribḥ*), any substantive difference remains between that contract and loan-based *ribā* with respect to the rationale for its prohibition. To answer this, the study first establishes the legitimacy of relying on the rationales (*ʿilal*) of rulings, following the view of Ayatollah Makarem Shirazi. It then derives three rationales for the prohibition of *ribā*: unlawful appropriation of wealth (*akl al-māl bi'l-bāṭil*), systemic injustice (*ẓulm*), and deterrence from productive economic activity. These are drawn from the narration of Muḥammad b. Sinān from Imam al-Riḍā (peace be upon him) and the narration of Hishām b. al-Ḥakam from Imam al-Ṣādiq (peace be upon him), and are formulated as a three-component analytical model applied to the case. The findings show that combining the two stipulations reallocates risk in such a way that all three rationales converge in the contract. The objections that capital still circulates in trade, that losses are rare, and that insurance protects capital do not alter this conclusion, since the criterion is the structural allocation of risk in the contract rather than the frequency of loss. Separating the rulings on the two stipulations is likewise jurisprudentially untenable |
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| Keywords: guarantee of principal, guarantee of profit, mudarabah, ribā, unlawful appropriation of wealth, nominal Islamization of ribā |
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Full-Text [PDF 327 kb]
(8 Downloads)
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Article type: Research |
Subject:
Special
Received: 2026/06/30 | Accepted: 2026/10/5
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