ishtirq

Ishtirq is a term that originates from Arabic and is commonly used in Islamic finance and economics. It refers to a type of partnership or investment where two or more parties contribute capital or labor to a venture with the understanding that profits and losses will be shared according to a pre-agreed ratio. This concept is central to Islamic Sharia law, which prohibits interest (riba).

In practice, ishtirq can take various forms. One common model is *mudarabah*, where one party provides capital and the other provides expertise and labor. Profits are shared, but if there is a loss, the capital provider bears the financial loss, while the labor provider loses their effort. Another form is *musharakah*, where all partners contribute capital and/or labor, and profits and losses are shared based on their respective contributions.

The underlying principle of ishtirq is the avoidance of interest and the promotion of risk-sharing and ethical investment. It encourages economic activity by allowing individuals and institutions to pool resources and expertise to undertake projects that might be too large or risky for a single entity. This model is widely employed in Islamic banking and investment funds.