An attorney and experienced professional in multinational relations, Jonathan D. Strum has been published in The Baltimore Sun and featured on media outlets including CNN, MSNBC, Fox News, and C-Span. Currently, Jonathan D. Strum operates a corporate and commercial law practice in Washington, DC, and regularly speaks around the world on the topic of Islamic finance.
To be categorized as Islamic Finance, financing tools must comply with Sharia law derived from the Quran and the Hadith. For example, Islamic Finance does not allow interest to be charged, investment in forbidden activities, or speculation and excessive risk. Some examples of financing arrangements that comply with Sharia law include Mudarabah, 'ijarah/'ijar, Salam, and Musharakah.
Musharakah refers to a Sharia-compliant joint venture or partnership in which all partners share in profits and losses that stem from the business arrangement. Often, this arrangement is utilized in real estate transactions, investments, or large financing agreements. In lieu of interest, the lender in Musharakah earns a return by collecting a portion of profits that are clearly defined in a business agreement.
