Application of the Mudhorobah Agreement in Sharia Farming Business Financing

Syadia Mutiara
Author ORCID iD
Institut Islam Al-Mujaddid Sabak (IIMS) Tanjung Jabung Timur, Jambi, Indonesia
Zaenal Abidin
Author ORCID iD
Institut Islam Al-Mujaddid Sabak (IIMS) Tanjung Jabung Timur, Jambi, Indonesia
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Abstract

Sharia financing, particularly through the mudharabah contract, offers a profit-sharing, interest-free capital alternative aligned with Islamic economic principles and is increasingly favored in the agricultural sector. This article aims to examine the effectiveness of mudharabah implementation in Islamic agricultural financing by employing a literature review method that incorporates scholarly sources and real-world practices. The findings indicate that mudharabah can serve as a fair and productive financing instrument when supported by transparency, accountability, and strong oversight systems. However, its implementation still faces challenges such as agricultural risks—like crop failure—and limited sharia financial literacy among farmers. The implications highlight the importance of enhancing education, fostering active involvement of Islamic financial institutions, and strengthening monitoring mechanisms to establish a sustainable Islamic agricultural financing ecosystem.

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Keywords

Mudharabah contract, Sharia financing, Islamic economics, agricultural financing

How to Cite

Mutiara, S., & Abidin, Z. (2025). Application of the Mudhorobah Agreement in Sharia Farming Business Financing. Zabags International Journal of Islamic Studies, 2(1), 38–46. https://doi.org/10.61233/zijis.v2i1.18
Published & Citation
2025-05-30
Vol. 2 No. 1 (2025): Islamic Studies
Copyright (c) 2025 The Author(s). This article is published by Zabags International Journal of Islamic Studies and distributed under the terms of the Creative Commons Attribution 4.0 International License (CC BY 4.0).
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