Islamic Economics Law: The Concept of Murabaha and

Musyarakah Mutanaqishah

Author by:
Rizky Rakhmadita, 1406546683
Lee Dong Ah, 1406563052

Faculty of Law
Universitas Indonesia
Depok 2015
1. Murabaha

Murabaha is basically the sale of goods at a price covering the purchase

price plus a profit margin agreed by parties concerned. In other words, the vendor
covers the purchase price for the purchaser that later will be paid by the purchaser
with added profit margin for the vendor, which already agreed by both parties
beforehand.
Murabaha transforms a traditional lending activity into a sale and purchase
agreement under which the lender buys raw materials, goods, or equipment
required by the borrower for reselling to the borrower at a higher price agreed upon
both parties. In this principle, Islamic banks are no longer share profits and losses,
but instead assume the role of a normal business entity.
As for the implementation and application, the personal murabaha is less
complicated than murabaha in Syariah Banking, which is obviously in a bigger
scope than personal murabaha. Considering that there are many people that require
assistance in funding distribution from the bank based on the principle of buying
and selling and in order to help the community to the establishment and
improvement of well-being and various activities, Islamic bank needs to have a
murabaha facility. Thus, Dewan Syariah Nasional deems that it is necessary to
establish a Fatwa on murabaha to be used as guidelines by Islamic bank which is
the “FATWA DEWAN SYARI’AH NASIONAL NO: 04/DSN-MUI/IV/2000 in
regards of murabaha”. The contents of the Fatwa consist of 6 (six) aspects,
namely;

1) General provisions in Syariah Bank:

First; In the practice of murabaha, Bank and the customer must free
usury/riba. Second; Goods that is to be sold are not forbidden by the
Shari'ah Islam. Third; Bank finance part or all of the purchase price of
goods is already agreed by both parties. Fourth; Bank will buy the
necessary goods for the customer on behalf of bank itself, and this
purchase to be valid and free of usury. Fifth; The Bank shall submit all
matters relating to purchase , for example, if a purchase is made in debt.
Sixth; Bank and then sell the goods to the customer (buyer) at the sale
 price amounting to the purchase price plus benefits. In this regard, the
Bank must notify honestly the cost of goods to the customer the
following charges required. Seventh; Customer will pay the agreed price
of the goods in a period of time that has been agreed by both parties.
Eight; To prevent tampering or damage contract the bank may enter into
a special agreement with customer. Ninth; If the banks want to delegate
to customers to buy goods from third parties, the murabaha sale and
purchase contract must be made after the goods, in principle, be owned
by the bank.

2) This fatwa also contains the murabaha provision to the customer:

First; The clients apply for a pledge and purchase of goods or assets to
the bank. Second; If the bank receives the request, it must buy first asset
lawfully ordered by the traders. Third; The Bank then offer those assets
to customers and customer must accept (buying) it in accordance with
the promise that have been agreed, as the promise is legally binding;
then both parties should make a contract of purchase and sell. Fourth; In
this practice, banks allowed to ask the customer to a down payment
when signing the preliminary agreement reservations. Fifth; If the
customer then refuse to buy goods, the cost of Real banks should be paid
from the deposit from the down payment. Sixth; If the value of the down
payment is less than the losses of the bank, the bank can reclaim the rest
losses to the customers. Seventh; If th down payment uses the contract
'as an alternative urbun of down payment’ then; a). if the customer
decides to buy the goods, the customer will just have to pay for
remaining price. b). if customers fails to buy the goods, the down
payment will belong to the bank for maximum amount of losses incurred
by banks as a result of the cancellation; and if the down payment is not
insufficient, the customer must pay off the remaining price.

3) The guarantees in murabaha that is given by customer:

First; Guarantee (‘jaminan’) in the murabaha is allowed, so that the
customers will take the contract seriously. Second; The Bank may
require the customr to provide collateral/guarantee that can be held.
 4) As this is a debt financing status, then this fatwa also explain the
status of the debt in murabaha:
First; Principally, the debt settlement of the customer in the transactions
of murabaha is not related to other transactions customer conducted with
third parties on the goods. If customer resell the goods at a profit or
losses, he remains obligated to complete its debt to the bank. Second; If
the customer sells the goods before the installment ends, he is not obliged
to immediately pay the entire installment. Third; If the sale of the goods
are causing harm or losses, the customers still have to settle the debt
according to the agreement. He should not slowing the installment
payment or ask to calculated the loss.

5) As this is a debt financing status, the fatwa also explains the delay in
the payment of Murabahah:
First; Customers who have the ability to pay for the debt is prohibited to
delay the debt settlement. Second; If the customer intentionally delaying
the payment or if one party does not fulfill its obligations, then the
settlement can be done through Arbitration Board Syari'ah after no
agreement is reached by consensus(musyawarah).

6) Bankruptcy in murabaha:
If the customer has been declared bankrupt and fails to finish the debt,
bank has to postpone the bill until the customer becomes able to return
the debt, or by agreement.

1. Musyarakah Mutanaqishah
a. Definition of Musyarakah and Mutanaqishah
Musyarakah and Mutanaqishah is a product derived from Musyaraka
contract, which is a form of cooperation agreement between two or more parties.
Basic words of Musharaka is derived from the word syirkah syaraka - yusyriku-
syarkan - syarikan - syirkatan ( shirkah ), which means partnership, company or
group/set. Musharaka or syirkah is collaboration between capital and profits.
While mutanaqishah derived from the word yatanaqishu - tanaqish - tanaqishan -
mutanaqishun which means reducing gradually.
Musyarakah Mutanaqishah (diminishing partnership) is a form of
cooperation between two or more parties to the ownership of goods or assets.
Where this cooperation will reduce the ownership rights of one party while the
other party increases its ownership rights. The transfer of ownership works with
the mechanism of payment of any other property right. This partnership ended with
the transfer of the right of one party to another.

b. Basic Principles of Musyarakah and Mutanaqishah

In Musyarakah and Mutanaqishah, there is an element of cooperation
(shirkah) and a lease (Ijara). Cooperation is done in the case of equity funds and
co-operation or ownership. While the lease is compensation given one party to
another. The main provisions contained in the basic provisions of Musyarakah and
Mutanaqishah has two elements which are Syirkah and Ijara.
Syirkah associated with the presence of the principal parties to cooperate and
capital, as the object of the Syirkah contract, and shighat (greeting agreements) are
conditions that must be met. As a condition of contract execution of syirkah, each
party must show agreement and willingness to work together, across party should
give a sense of mutual trust with others, and in the capital is the principal mixing
mixing respective rights in the ownership of the object of the contract.
With regard to the principal provisions of the lease elements include; tenant
(musta'jir) and rents (mu'jir), shighat (greeting agreement), ujrah (fee), and the
goods/items leased the object of the lease contract. The amount of the rent must be
clear and known to both parties.
In syirkah Mutanaqishah, it must be clear when the amount of the
installment and the amount of rent to be paid by customers. And, the provision of
payment time limits a requirement that must be known to both parties. Rental rates,
the size of the rental price, can be changed according to the agreement. Within a
certain time large-small rental agreements can be done again.
 c. Akad provisions Musharaka Mutanaqishah
Because there are Shirkah and Ijarah, then both the terms of the contract
must be fulfilled.
 Shirkah contract provisions:
- Parties cooperate.
- Capital and object to be possessed.
- The agreement of both parties to cooperate, and mutual trust between the two
sides.
- The existence of mixing respective rights in the ownership of assets.
 Ijarah provisions:
- Tenant (Customer), and lease (the Bank).
- The agreement between two parties.
- Objects for rent/insurance.
- Lease payments, the payment amount and payment terms must be clear and
approved both.

d. Akad law Musharaka Mutanaqishah

Because Akad Musharaka contract and Syirkah Mutanaqishah also a
(cooperation), Ijarah (lease), the law is used;
 Shirkah (Cooperation):
Qur'an Surah Shad [38], paragraph 24:
"... And in fact most of the people who bersyarikat that some of them do wrong to
others, except those who believe and do righteous deeds; Very few, and they have
.... "
 Ijarah (Lease):
Qur'an Sura al-Zukhruf [43], paragraph 32:
"Do those who dispenses mercy of your Lord? We have apportioned among them
their livelihood in the life of the world, and we raised some of them over others
some degree, seba-gian so that they can use some of the others. And the mercy of
your Lord is better than what they collect. "
e. Akad risk Musharaka Mutanaqishah
a. Risk of Ownership:
Asset of ownership will gradually become the property of the customer, which was
previously a joint asset, this happens because the customer makes a payment worth
of assets owned by the Bank.
b. Credit Risk:
It is feared that the customer is unable to pay installments to the bank on time, and
it is this, which can lead to the emergence of losses in the bank.
 BIBLIOGRAPHY

 Al- Quran
 Haron, Sudin. Islamic Banking: Rules & Regulations. Malaysia: Pelanduk
Publication, 1997.
 Dsnmui.or.id. 'FATWA DEWAN SYARI’AH NASIONAL NOMOR
04/DSN-MUI/IV/2000 TENTANG MURABAHAH'. Web. 27 Sept. 2015.
 Azhar Rosly, Saiful. Critical Issues On Islamic Banking And Financial
Markets. 3rd ed. Kuala Lumpur: DinamaS, 2008. Print.
 Ifham Sholihin, Ahmad, Pedoman Umum Lembaga Keuangan Syariah