This research lined up to spot red flags of one’s Modaraba con and offers some pointers toward reduction regarding Ponzi schemes. Good thematic research of the studies, compiled due to partial-organized interview with to try to get decide to try participants, enabled the newest scientists to summarize to your compound of one’s ripoff. Efficiency indicated that critical red flags of one’s fraud is higher earnings, emptiness money arrangements, multifaceted, advanced and you can unregistered businesses, great and participative rate of agents’ commission, and deferred occasional winnings. Conclusions after that recommend that buyers and you may state-focus on regulating government might help throughout the avoidance off Ponzi techniques with the owed exercise of the spots.

Cards

Modaraba is an enthusiastic Islamic union within movie director/Modarib and you will proprietor off finance/Rabul-Mal; where owner of a fund invests currency plus the director capitalizes his knowledge to own powering a good permissible company (Hassan and you may Lewis 2007; Usmani 2002). Modarib and you can Rabul-Mal distribute cash in on business while the agreed upon ration, although losses is usually to be modified against the states out-of Rabul-Mal (Usmani 2002).

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“O you that sensed, after you deal a debt having a designated label, create they off. And you can let an excellent scribe create [it] between your inside the justice. Help zero scribe will not create just like the Allah has educated your. So assist him build and you may allow individual that has got the obligation dictate. And assist him worry Allah, their Lord, and never get-off something out of it. But if the person who gets the responsibility are out of restricted facts otherwise weak or unable to dictate himself, after that help their protector dictate from inside the justice. And you can bring to experience a couple witnesses from among your own guys. And in case discover not one or two boys [available], then men as well as 2 girls regarding people who you take on because the witnesses-so as that if one of lady errs, then the most other can be remind her. And help maybe not the new witnesses refute while they are contacted. And do not become [too] weary to type it, whether it’s large or small, because of its [specified] term. That’s more merely regarding the sight away from Allah and stronger as the evidence and much more gonna avoid doubt anywhere between your, but in case it is a direct deal which you carry out certainly yourselves. Getting [then] there’s no blame abreast of your unless you establish they. Or take witnesses when you stop a contract. Let no scribe end up being hurt otherwise any experience. To have in the event you therefore, in reality, it’s [grave] disobedience in you. And concern Allah. And you may Allah teaches you. And Allah is Awareness of everything.” (The fresh Qur’an, 2:282).

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