Mudarib

Mudarib (Arabic: مضارب) is the managing partner or entrepreneur in a Mudarabah contract who contributes expertise, labour, and management skills to a joint venture, while the Rab al-Maal (capital provider) supplies all the capital. The Mudarib is entitled to a pre-agreed share of profits as compensation for their efforts, but bears no financial loss beyond the loss of their time and effort — all financial losses are absorbed by the Rab al-Maal. The Mudarib has exclusive management authority and may not be held liable for losses arising from normal business risk, unless loss results from negligence, misconduct, or violation of contract terms. In modern Islamic banking, the bank acts as Mudarib when managing investment accounts on behalf of depositors. Islamic fund managers operate as Mudarib to fund investors. The distinction between Mudarib (manager, no capital) and Musharik (partner, contributes capital) is fundamental to Islamic finance structuring.