AskImamDarul Iftaa Mahmudiyyah (AskImam)

Money is borrowed for business investment. No fixed time for repayment is made. Payback an X amount per week for as long as capital sum not paid is the condition as profit. Is this allowed in Islam.

Fatwa 832English
Finance and Commerce

Question

Amount borrowed R42000. Pay R500 per week as "PROFIT". Time when money to be paid back not set. Can Muslims enter into transactions like this? (R = Rand, South African Currency)

Answer

The weekly amount of R500 will be payment towards the loan of R42000. It is not a profit. It is not permissible to demand or pay anything in excess to R42000 as that will be interest. Rasulullah (SAW) SAID, every loan that draws a benefit will be interest and haram.

Was salaam

Mufti Ebrahim Desai
FATWA DEPT

Answered by
Mufti Ebrahim Desai
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