Our Problem with Terminology

Murabahah, Muharabah, Mubaraha, Murababa, Mudharabah, Marhabah and Muhababah are all Arabic words, not necessarily pertinent to Islamic banking and finance or to anything to do with the objectives of Islamic law. However, if anyone wants to be a true professional in the field of Islamic banking and finance he or she must be able to spot which of the above words are relevant.

The issue doesn’t stop here. Whether one speaks Arabic or not, identifying which of the above words is relevant to Islamic finance is the easy part. It becomes more difficult when one tries to understand what they really entail and how they can be applied in a modern financial market or in order to design “authentic” banking products. The only means available to do so is by way of going back...