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During the duration of ijara, the leasee gains the right to use an asset in exchange for periodic payments to the leasor, while the leasor keeps ownership of the asset. However, in the case of an ijara muntahiya, the ownership of the asset is transferred to the lease at the end of the leasing term.

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Takaful is different from conventional insurance as it covers risk sharing rather than risk transfer.

Participants pool their money into a risk fund specially created for covering any losses incurred by a participant. The payments are characterized as a donation or contribution, made by the participants with sincere desire to take care of each other in the event of loss. It is managed by a takaful operator acting solely as an agent and is limited to receiving fee-based compensation for managing the risk fund.

On the other hand, conventional insurance has a gambling features and an uncertainty features and transfer risk of loss from the customer to the insurance company

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Musharaka is a an equity-based financing based upon partnership principles where the financial institution and the customer engage in a business venture or purchase an asset together

The financial institution and the customer share in the risk and profits/ losses from the joint investment and ownership on a prorated basis.

The profit of the grocery store will be shared based on the weighted average of the investment contribution by the 2 parties.

($690,000 / ($735,000 + $690,000)) x $450,000 = $217,894.74

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There are many differences between Islamic finance and conventional finance. While the prohibition of riba, defined as excess charges such as interest is one of the primary differences, there are more differences:

- Money is always traded at face value in Islamic finance, while it can be traded at a price higher or lower than its face value in conventional finance.

- Islamic finance rewards based on the risk taken and shared, while conventional finance focuses on eliminating or transferring risk. Therefore, no pre-determined rate of return is guaranteed in Islamic finance.

- The basis of profit is through the time value of economic resource such as good and services in Islamic banking, while time value of money is the basis of charging interest on capital.

- Due to prohibitions of excessive uncertainty, options, short-selling, futures, FX and insurance do not exist in Islamic finance.