Crofters Shariah-Based farm sharing
Crofter follows the concept of Mudarabah for receiving and supervising funds for Agricultural purposes.
How It Works
1. Investor
Individuals or organizations can invest in sharing farms at a fixed time period and get a return at a predetermined ratio.
2. Crofter
The Crofter team provides supervision and support to farmers to ensure proper fund use and maximize profits.
3. Farmers
Rearing cattle with proper care for a fixed period of time and ensuring there maximum profit.
Mudarabah
This is an agreement made between two parties: one which provides 100 percent of the capital for the project and another party known as a Mudarib who, using his entrepreneurial skills, manages the project. Profits arising from the project are distributed according to a predetermined ratio. Any losses accruing are borne by the provider of capital. The provider of capital has no control over the management of the project.
Key point
The capital provided by Rab-Al-Maal will be collected by the Mudarib(Crofter) for agricultural projects and return the fund along with a pre-agreed share of the munafa.
Crofter’s Mudarabah Implementation Guideline
- Crofter makes an agreement with investors for a specified period of time at a specific rate of munafa sharing.
- An investment is shared by Crofter with farmers on a prearranged munafa basis within a specific period of time.
- Crofter supervises farmers as they raise agricultural products.
- Crofter sells the final product and calculates the munafa.
- Crofter returns capital to investors with munafa and shares it with the farmers as pre-arranged.
- Crofter supervises the farm's vet service, insurance, management, and other issues related to the farm.
- The investor has no control over the management/supervision of the project but crofter has the supreme power to supervise the project.
- Rab- Al- Maal (Investor) is not liable for the losses beyond the capital he has contributed.