What is Musharika?

Musharika means Partnership. It is a widely used Islamic banking product in which bank and its customers enter into an association through partnership agreement. In this Islamic mode of financing, each party shares to the capital of the partnership equally or in variation to develop a new project or participate in an on-going project. The profit is divided between the parties with a predetermined method, while losses are shared mutually on a pro-rata basis.


Diminishing Musharika

How does it work?

Diminishing Musharakah ultimately culminates in the ownership of the asset / project by the client. The bank participates as a financial partner, in full or in part, in an asset/project with a given income forecast. The share of the bank is divided into ‘units of ownership’ and the client undertakes to periodically purchase the units representing the share of the bank, thus increasing his own share till all the units of the bank are purchased by him, so as to become the sole owner of the asset.

What we offer?

Within Diminishing Musharika, Islamic Bank of Afghanistan and our client will enter into a Musharika contract to mutually buy the asset. The bank’s shares will be divided into various units and the client will buy the units pertaining to the bank on a periodic basis until the client poses the entire ownership of the asset.


  • Joint ownership between the Bank and Customer
  • Financing of fixed assets, long term projects
  • House, plant ,machinery and factory financing
  • Conversion of conventional loan into Islamic financing is limited to the specified assets and not to the whole enterprise or business.

How it will benefit you?

  • Diminishing Musharika is an ideal Islamic finance feature for medium to long term banking as it offers adaptable financing terms to fulfil the clients’ demands.

To whom it is offered?




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