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One disadvantage of musharakah, a partnership-based Islamic finance model, is the potential for conflicts among partners due to differing management styles, goals, or profit-sharing expectations. Additionally, it requires a high level of trust and transparency, which may be challenging to maintain. The complexity of structuring the partnership and the need for thorough legal agreements can also lead to increased costs and time investment.

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What are the advantages and disadvantages of musharakah?

Musharakah, a partnership-based financing model in Islamic finance, offers advantages such as shared risk and profit, fostering trust and collaboration among partners. It promotes ethical investment and aligns with Islamic principles, avoiding interest-based transactions. However, disadvantages include potential conflicts in decision-making, the complexity of agreements, and the challenge of managing diverse partner expectations and contributions. These factors can complicate operations and affect the overall success of the venture.


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