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WorksheetsIslamic Crowdfunding
Total questions: 11
Worksheet time: 6mins
What is the distinct difference between Islamic crowdfunding & conventional crowdfunding?
An Islamic crowdfunding void Riba (interest/ usury), gharar (excessive uncertainty), qimar (gambling). Funds raised for shariah compliant campaigns through a shariah compliant contracts.
Conventional crowdfunding is conducted through digital or online platforms, without physical presence.
In an Islamic crowdfunding, a marketplace is created between funders and fund-recipients, be it investments or charitable donations without returns according to Shariah.
In an Islamic crowdfunding, only equity and donation-based funding is created where parties are given rewards/returns according to Shariah.
What are the stages of Shariah consideration in Islamic crowdfunding?
Pre-campaign and during campaign.
Pre-campaign, during campaign, and post project maturity.
Pre-campaign and Post Project maturity.
During campaign and Post project maturity.
Financial ratio screening is part of:
Pre-campaign screening
During campaign
Post maturity
Pre-campaign and during campaign
What are the main parts of Pre-campaign screening in Islamic crowdfunding?
Campaign screening, assessing promotional materials and reviewing disclosures; in accordance to Shariah.
Business type and activity screening and Financial Screening; in accordance to Shariah.
Business type and activity screening and Financial Screening with finalizing the contracts; in accordance to Shariah.
Campaign screening, drawing contracts, assessing promotional materialsand reviewing disclosures; in accordance to Shariah.
The types of contracts in an Islamic crowdfunding are:
Between the issuer and platform operator (Ijarah/ Wakalah bil ujrah) and between investor and platform operator (Ijarah/ Wakalah bil ujrah).
Between the issuer and the investor only (either; Musharakah, Mudarabah, Murabahah, Salam, Istisna, Ijarah).
Between investors and issuer (either; Musharakah, Mudarabah, Murabahah, Salam, Istisna, Ijarah), between issuer and platform operator (Ijarah/ Wakalah bil ujrah) and between investors and operator (Ijarah/ Wakalah bil ujrah).
Musharakah, Mudarabah, Murabahah, Salam and Istisnah
A Musharakah contract is
An equity partnership or a joint enterprise where partners merge theircapital and share both profit and loss.
A partnership in profit and loss whereby one party provides capital (Rabal-maal) and the other party provides labour.
It’s a joint partnership where the profit and loss for each partner must becalculated in proportion to the capital invested by the partner.
An equity partnership or a joint enterprise and share profit while loss isborne by the financing party.
The distinct difference between Mudarabah and Musharakah is
In Musharakah one party contribute capital, and in Mudarabah all partners contribute capital.
In Mudarabah profit is guaranteed to the financier.
In Mudarabah, all partners share the loss, while in Musharakah, only financier bears loss.
In Musharakah all the partners contribute capital, while in Mudarabah rabbul Mal only contributes capital.
Choose the true statement from below relative to guarantees in Musharakah
A partner can guarantee the capital or profit of the other partner.
A third party can provide a guarantee if the third party is a separate legal entity, if guarantee is not linked to the Musharakah and if guarantor or the guaranteed should not own or be owned by the other party by 50% or more.
Third party cannot provide a guarantee for a Musharakah arrangement.
The active partner is only responsible for the assets of the partnership.
Ahmed and Ali established a business based on Musharakah where profits are to be shared at 70:30. Ahmed invested 40% of total capital. The first year the business earned a loss of $50000. How are the losses shared?
Ahmed bears $15000 and Ali bears $35000.
Ahmed bears $35000 and Ali bears $15000.
Ahmed bears $20000 and Ali bears $30000.
Ahmed bears $30000 and Ali bears $20000.
Which of the following is not true?
Profit Sharing ratio can be changed after the initial agreement unilaterally
Parties can agree on any PSR, but the PSR should not exceed the capital contribution ratio.
Profit sharing ratio (PSR) should be determined at the inception.
Profit ceiling is permissible - if the profit is above a certain ceiling, the excess will be given to a particular partner.
From the following campaigns which is Shariah Compliant according to AAOIFI standards?
Campaign A: “We are delighted to launch the latest campaign on our platform - Rafid Poppy. This new campaign is projected to complete in 2-3 months with guaranteed returns of 5.85%. The work order involves procuring consumables, equipment, and chemical housekeeping projects for 19 Pertamina buildings in several locations across Indonesia.”
Campaign B: “We are delighted to launch the latest campaign on our platform – TGV Cinemas. This new campaign is projected to complete in 1-2 months with projected returns of 4%.”
Campaign C: “We are offering “Redeemable Preference Shares B (RPS B)”with a minimum investment of RM 1,000. If or when the company IPOs,these shares will convert into RM 3000 (from the RM 1000) of shares. If an IPO does not take place within 2 years., investors may redeem their shares at a 10% premium.”
Campaign D: We are delighted to launch the latest campaign on our platform - Max & Milo 2. This new campaign is projected to complete in 3 months with projected returns of 5%. Max & Milo needs financing to purchase and install five drinking water machines in five Islamic boarding schools.”
