Murabaha Syndrome

One of the objectives of Islamic finance during its formative years was to distribute financing techniques grounded on labor-capital partnership, which have a positive impact on the economic values of society. Hence, theoretical investigations frequently underscore the favorable effects of partnership structures like mudaraba/musharakah. Nevertheless, financing models based on labor-capital partnership are not the preferred choice in the sector. Islamic financial institutions primarily favor financial instruments like Murabaha and Ijara due to their low risk and ease of use. However, this practice has been criticized for making Islamic finance similar to conventional banking.