Purpose – The main purpose of this paper is to provide a comprehensive review of musharakah mutanaqisah (MM; diminishing partnership) technique and its potentials for Islamic financial institutions.Design/methodology/approach – Based on an extensive literature review, this paper aims to...

Abstract. This paper compares default rates on Islamic and Western mortgages. Islamic mortgages feature a ‘partnership’ arrangement between the bank and the borrower, which allows the borrower to recover the current market value of his accumulated equity upon default. By itself, this makes...