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Abstract

Agriculture is a cornerstone of South Asia's economy and food security, yet it faces challenges such as financial exclusion and inefficiencies in traditional financing models. This study explores the potential of Mugharasah (Agricultural Certificates), a Shariah-compliant ethical financing tool rooted in Islamic finance principles like Mudarabah and Musharakah, to address these issues. Mugharasah emphasizes risk-sharing and equitable profit distribution, offering an alternative to interest-based loans and rigid microfinance structures. This research evaluates Mugharasah's role in enhancing financial inclusion, improving food security, and promoting sustainable agricultural practices. A mixed-methods approach, including surveys and comparative analyses, highlights Mugharasah's advantages in terms of flexibility, reduced financial burdens on smallholder farmers, and its alignment with sustainability goals. While findings reveal no significant statistical differences between Mugharasah and microfinance regarding risk-sharing or sustainability perceptions, Mugharasah demonstrates potential as a more equitable and performance-linked financing model. Policy recommendations advocate for government support, regulatory frameworks, and tailored financial products to integrate Mugharasah into South Asia's agricultural landscape, fostering a pathway toward ethical finance and sustainable development.
Keywords: Mugharasah, Ethical Finance, Islamic Finance, Sustainable Agriculture, Food Supply Chain, Financial Inclusion, South Asia.