Parties involve in profit loss sharing

   In a financial contract, there are two active agents which are lenders of funds also referred to as depositors and next is the borrower of funds also referred to as entrepreneurs. Pertaining from that, a bank will be considered an active party to the contract because the bank is generally assumed to play the purely intermediary role in bringing the two parties to the contract together. 
 
   As a pure intermediary, the bank provides services for both parties, and it covers its administrative expenses by charging both parties a fee. If in a conventional banking system, the different between lending and borrowing rates of interest includes a profit margin, then this differential exceeds the total administrative fee by the extent of the margin.
 
  This leaves the shares of the active parties to the contract to be determined. To begin with, the mudaraba contract, where all funds are provided by the lenders, will be considered. In musharakah contract, where the entrepreneurs also provide part of the funds for the project, say from retained earnings, will be analyzed

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