In Arabic it is called Shirkat-ul-Mutanaqisa. Diminishing Musharaka is just a Musharaka with an additional feature of decreasing ownership of one party. This differs from normal Musharaka, where ownership ratio does not change.

Basic Conditions

FHM offers Diminishing Musharaka on basis of Shirkat-ul-Milk

The arrangement is composed of the following key activities

1. To create joint ownership in Musharaka asset.

2. Giving share of the FHM to client.

3. Promise of client to purchase units/share of the FHM.

4. Purchase of the FHM's units.

5. Adjustment of profit according to share of the FHM in Musharaka asset.