My question is regarding Lending money.
I leant a £1000 to a friend of mine 10 years ago. At the time, he was supposed to pay me back the following month, but failed to do so. Our friendship broke down and we lost touch, and have just recently managed to make up again. He is willing to give me back the £1000, whereas, I think he should be paying me back more. The reason behind my thinking is I think, 10 years ago it would take me 3 months to earn the £1000, and now it only takes 1 month. The price of goods has also increased – £1000 ten years ago could get me a lot more than what it can get me now. For example, 10 years ago, the price of a house was on average £70,000, but the average house price now is around £120,000.
In conclusion, the price of goods has increased, as well as peoples salaries, making the population, no better, no worse. Economists generally regard this as inflation.
Considering these circumstances, is it not permissible for me to ask for more money from the person I loaned the money to?
In the name of Allah, Most Gracious, Most Merciful
Assalaamu `alaykum waRahmatullahi Wabarakatuh
It is not permissible for you to claim the loan based on the inflation rate. Your friend owes you 1000 pounds. The excess amount will be regarded as interest.
And Allah knows best
Wassalam
Mufti Ebrahim Desai
Darul Iftaa, Madrassah In’aamiyyah