What is diminishing Musharakah?

Suggest a way that how Islamic

financing can be done under this mode of financing?
Answer:
Diminishing musharakah is a joint partnership in which for example an
asset is shared by 2 parties, where one party pays for it and possess the
ownership and the other pays its installments and possess a share in
the ownership with each installment made from the 1st party. For
example, a party in a joint venture buys a house and pays the
installments to the partner and possess a share in ownership with each
installment and upon his last installment ownership is completely
transferred to him.

Ways of Islamic Financing under musharakah:

1. A joint venture between the buyer and the Islamic bank.
2. Lease agreement between financial institution and the customer,
financial institution will hire a portion of the asset to the customer
and upon last installment will transfer ownership.
3. 1/3rd contract called an income contract which defines that
customer will purchase the financial institution’s share steadily at
pre agreed periods and rate.