Reassessing Mudharabah and Musyarakah as Risk Sharing Alternatives for Interest-Free Financing
Click to verify publication status
Authors
-
Very Wahyudin
Department of Accounting, STIE Gema Widya Bangsa, Bandung, West Java 40623, Indonesia
-
Muhammad Zhilal Al Farisi
Department of Accounting, STIE Gema Widya Bangsa, Bandung, West Java 40623, Indonesia
-
Haidar Azhar Al-Ghifari
Department of Accounting, STIE Gema Widya Bangsa, Bandung, West Java 40623, Indonesia
-
Liya Setiawati
Department of Management, STIE Gema Widya Bangsa, Bandung, West Java 40623, Indonesia
DOI:
Keywords:
Mudharabah, Musyarakah, Risk sharing, Shariah governanceAbstract
Purpose - This study evaluates the effectiveness of mudharabah and musyarakah as interest-free financing mechanisms by examining their Shariah integrity, risk-sharing structure, financial viability, and institutional scalability. It also identifies the structural and operational conditions that support or constrain their implementation within Islamic banking.
Design/methodology/approach - A qualitative descriptive-analytical design is employed through library and documentary research within an interpretivist paradigm. Evidence is drawn from peer-reviewed studies, academic literature, regulatory documents, fatwas, and institutional reports. The materials are analysed using document analysis, qualitative content analysis, thematic analysis, and source triangulation to integrate normative, operational, governance, and financial dimensions.
Findings - Mudharabah and musyarakah are effective when genuine risk sharing, equitable profit-and-loss allocation, transparency, and contractual integrity are preserved. Their financial viability depends on financing risk, liquidity, monitoring capacity, and institutional quality. Major constraints include information asymmetry, adverse selection, moral hazard, return-smoothing pressures, collateral design, weak financial reporting, limited financial literacy, and uneven Shariah governance.
Originality/value - This study distinguishes substantive Shariah effectiveness from financial-operational effectiveness and integrates contractual design, governance quality, information conditions, and financial outcomes within a unified framework. It shifts attention from formal contract classification toward the institutional mechanisms that determine whether partnership-based Islamic financing becomes scalable, credible, and sustainable.
Downloads
References
Abdul-Rahman, A., Abdul Latif, R., Muda, R., & Abdullah, M. A. (2014). Failure and potential of profit-loss sharing contracts: A perspective of New Institutional, Economic (NIE) Theory. Pacific Basin Finance Journal, 28. https://doi.org/10.1016/j.pacfin.2014.01.004
Alhammadi, S., Alotaibi, K. O., & Hakam, D. F. (2022). Analysing Islamic banking ethical performance from Maqāṣid al-Sharī‘ah perspective: evidence from Indonesia. In Journal of Sustainable Finance and Investment (Vol. 12, Number 4). https://doi.org/10.1080/20430795.2020.1848179
Alhammadi, S., Archer, S., Padgett, C., & Abdel Karim, R. A. (2018). Perspective of corporate governance and ethical issues with profit sharing investment accounts in Islamic banks. Journal of Financial Regulation and Compliance, 26(3). https://doi.org/10.1108/JFRC-01-2017-0014
Ali, M. M., Devi, A., Furqani, H., & Hamzah, H. (2020). Islamic financial inclusion determinants in Indonesia: an ANP approach. International Journal of Islamic and Middle Eastern Finance and Management, 13(4). https://doi.org/10.1108/IMEFM-01-2019-0007
AlShattarat, W. K., & Atmeh, M. A. (2016). Profit-sharing investment accounts in islamic banks or mutualization, accounting perspective. Journal of Financial Reporting and Accounting, 14(1). https://doi.org/10.1108/jfra-07-2014-0056
Anhar, Z. (2022). Penerapan Akad Musyarakah Pada Perbankan Syariah. Jurnal Ilmu Perbankan Dan Keuangan Syariah, 4(2). https://doi.org/10.24239/jipsya.v4i2.145.110-122
Ben Jedidia, K. (2020). Profit- and loss-sharing impact on Islamic bank liquidity in GCC countries. Journal of Islamic Accounting and Business Research, 11(9). https://doi.org/10.1108/JIABR-10-2018-0157
Bowen, G. A. (2009). Document analysis as a qualitative research method. Qualitative Research Journal, 9(2). https://doi.org/10.3316/QRJ0902027
Dewan Syariah Nasional-MUI. (2020). Fatwa Dewan Syariah Nasional-Majelis Ulama Indonesia No: 135/Dsn-Mui/V/2020 Tentang Saham. Dewan Syariah Nasional MUI, 135(V).
Fuis Sukma Ayu, & Dian Filianti. (2022). Determinants of Financial Inclusion Information Disclosure of Islamic Rural Banks in Indonesia. Jurnal Ekonomi Syariah Teori Dan Terapan, 9(6). https://doi.org/10.20473/vol9iss20226pp923-935
Hidayat, Iyoyo Dianto, Zulhelmy, Muhammad Arif, & Abdul Majid. (2025). Peran Dewan Syariah Nasional Majelis Ulama Indonesia dan Dewan Pengawas Syariah terhadap Implementasi Akad Syariah di Perbankan Syariah Indonesia. Syarikat: Jurnal Rumpun Ekonomi Syariah, 8(1). https://doi.org/10.25299/syarikat.2025.vol8(1).22238
Hsieh, H. F., & Shannon, S. E. (2005). Three approaches to qualitative content analysis. Qualitative Health Research, 15(9). https://doi.org/10.1177/1049732305276687
Ibrahim, Z., Effendi, N., Budiono, B., & Kurniawan, R. (2022). Determinants of profit and loss sharing financing in Indonesia. Journal of Islamic Marketing, 13(9). https://doi.org/10.1108/JIMA-01-2020-0015
Ji, Y. (2024). A Methodological Exploration of Document Analysis as a Qualitative Research Method. Korean Association for Qualitative Inquiry, 10(3). https://doi.org/10.30940/jqi.2024.10.3.25
Khandelwal, S., & Aljifri, K. (2021). Risk sharing vs risk shifting: a comparative study of Islamic banks. Journal of Islamic Accounting and Business Research, 12(8). https://doi.org/10.1108/JIABR-08-2018-0121
Korstjens, I., & Moser, A. (2018). Series: Practical guidance to qualitative research. Part 4: Trustworthiness and publishing. European Journal of General Practice, 24(1). https://doi.org/10.1080/13814788.2017.1375092
Levitt, H. M., Bamberg, M., Creswell, J. W., Frost, D. M., Josselson, R., & Suárez-Orozco, C. (2018). Journal article reporting standards for qualitative primary, qualitative meta-analytic, and mixed methods research in psychology: The APA publications and communications board task force report. American Psychologist, 73(1). https://doi.org/10.1037/amp0000151
Mahyudin, W. A. tirah, & Rosman, R. (2022). Performance of Islamic banks based on maqāṣid al-sharīʿah: a systematic review of current research. In Journal of Islamic Accounting and Business Research (Vol. 13, Number 4). https://doi.org/10.1108/JIABR-10-2020-0337
Malterud, K. (2001). Qualitative research: Standards, challenges, and guidelines. In Lancet (Vol. 358, Number 9280). https://doi.org/10.1016/S0140-6736(01)05627-6
Meslier, C., Risfandy, T., & Tarazi, A. (2017). Dual market competition and deposit rate setting in Islamic and conventional banks. Economic Modelling, 63. https://doi.org/10.1016/j.econmod.2017.02.013
Meslier, C., Risfandy, T., & Tarazi, A. (2020). Islamic banks’ equity financing, Shariah supervisory board, and banking environments. Pacific Basin Finance Journal, 62. https://doi.org/10.1016/j.pacfin.2020.101354
Moser, A., & Korstjens, I. (2017). Series: Practical guidance to qualitative research. part 1: Introduction. European Journal of General Practice, 23(1). https://doi.org/10.1080/13814788.2017.1375093
Mujiatun, S., Trianto, B., Cahyono, E. F., & Rahmayati. (2023). The Impact of Marketing Communication and Islamic Financial Literacy on Islamic Financial Inclusion and MSMEs Performance: Evidence from Halal Tourism in Indonesia. Sustainability (Switzerland), 15(13). https://doi.org/10.3390/su15139868
Mutamimah, M., & Saputri, P. L. (2023). Corporate governance and financing risk in Islamic banks in Indonesia. Journal of Islamic Accounting and Business Research, 14(3). https://doi.org/10.1108/JIABR-09-2021-0268
Narayan, P. K., & Phan, D. H. B. (2019). A survey of Islamic banking and finance literature: Issues, challenges and future directions. Pacific Basin Finance Journal, 53. https://doi.org/10.1016/j.pacfin.2017.06.006
Nowell, L. S., Norris, J. M., White, D. E., & Moules, N. J. (2017). Thematic Analysis: Striving to Meet the Trustworthiness Criteria. International Journal of Qualitative Methods, 16(1). https://doi.org/10.1177/1609406917733847
OJK. (2023). Pedoman Produk Murabahah Pembiayaan Perbankan Syariah. Otoritas Jasa Keuangan, 4(1).
Paul Usmany. (2024). Pengaruh Pembiayaan Musyarakah, Mudharabah dan Murabahah Terhadap Profitabilitas Bank Umum Syariah di Indonesia. El-Mal: Jurnal Kajian Ekonomi & Bisnis Islam, 5(7). https://doi.org/10.47467/elmal.v5i7.4401
Rouetbi, M., Ftiti, Z., & Omri, A. (2023). The impact of displaced commercial risk on the performance of Islamic banks. Pacific Basin Finance Journal, 79. https://doi.org/10.1016/j.pacfin.2023.102022
Safiullah, M., Miah, M. D., Azad, A. S., & Hassan, M. K. (2024). Does the board of directors influence Shariah governance in Islamic banks? Pacific Basin Finance Journal, 85. https://doi.org/10.1016/j.pacfin.2024.102346
Salman, K. R. (2023). The Determinants of Profit-Loss Sharing Financing of Islamic Banks in Indonesia. Muqtasid: Jurnal Ekonomi Dan Perbankan Syariah, 13(2). https://doi.org/10.18326/muqtasid.v13i2.95-111
Sandelowski, M. (2010). What’s in a name? Qualitative description revisited. Research in Nursing and Health, 33(1). https://doi.org/10.1002/nur.20362
Sari, M., & Asmendri, A. (2020). Penelitian Kepustakaan (Library Research) dalam Penelitian Pendidikan IPA. Natural Science, 6(1). https://doi.org/10.15548/nsc.v6i1.1555
Snyder, H. (2019). Literature review as a research methodology: An overview and guidelines. Journal of Business Research, 104. https://doi.org/10.1016/j.jbusres.2019.07.039
Tracy, S. J. (2010). Qualitative quality: Eight a"big-tent" criteria for excellent qualitative research. Qualitative Inquiry, 16(10). https://doi.org/10.1177/1077800410383121
Tracy, S. J., & Hinrichs, M. M. (2017). Big tent criteria for qualitative quality: Why do we need criteria for qualitative research? The International Encyclopedia of Communication Research Methods.
Warninda, T. D., Ekaputra, I. A., & Rokhim, R. (2019). Do Mudarabah and Musharakah financing impact Islamic Bank credit risk differently? Research in International Business and Finance, 49. https://doi.org/10.1016/j.ribaf.2019.03.002
Yaya, R., Saud, I. M., Hassan, M. K., & Rashid, M. (2021). Governance of profit and loss sharing financing in achieving socio-economic justice. Journal of Islamic Accounting and Business Research, 12(6). https://doi.org/10.1108/JIABR-11-2017-0161
Downloads
Published
Issue
Section
License
Copyright (c) 2025 Very Wahyudin, Muhammad Zhilal Al Farisi, Haidar Azhar Al-Ghifari, Liya Setiawati (Author)
This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.
Journal International Economic Sharia (JIES) © 2024 by Inovasi Analisis Data is licensed under CC BY-SA 4.0
How to Cite
