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2. friend offer me a motorbike of 12 million in cash, but he give me a choice to pay in credit for either 2,3,4 or 5 years.. Is this scheme OK?

Answered as per Hanafi Fiqh by Askimam.org

1. Our company have a fund institution which has 100 members. This members will have to pay a compulsory savings to become a member, and they can also have a voluntary savings. The inst. have a shop, in which it sells goods (to earn some profit). It also lend money to its member (for personal use etc.). They want to avoid charging interest for its member, but on the other side they also have to get income to manage the admin, workers etc. At the end of the year, the inst. will distribute its profit to the members. How should they charge the borrower without interest ? Can they charge a variable administration fee (varied according to the amount they borrow) ? 2. My friend offer me a motorbike of 12 million in cash, but he give me a choice to pay in credit for either 2,3,4 or 5 years. If we calculate the total amount after paying 2 or 3 years, it would be higher than the cash. The total amount of 2 years payment would also be different with 3, 4 and 5 years. Is this scheme OK? 3. We read in the hadith that when we see non-muslim (yahudi and nashara) we should push them to the side of the street (riyadhus Shalihin, bab ettiquete of giving salam).is this correct ? 4. I want to borrow money from my friend and let him have my motorbike as a guarantee until I pay his money back is this OK? Jazakallaahu khair..

Answer

1. The institution have a few options:

a. They can work on a profit basis, i.e. they may purchase the item that the borrower requires and then sell it to him at a profit.

b. They may also enter into a Mudhaarabah contract with its members. The fund can provide the capital for a business and the members engage in business. The profits can then be shared proportionately between the two.

NB. It is not permissible for you to charge a variable administration fee according to the amount borrowed. This is Riba.

2. If at the time of the transaction, it is made clear that you are buying in cash or credit, then it is permissible. Note: Whether you are buying on credit, then the time should also be stipulated, i.e. 2, 3 or 5 years so as not to leave the price of the item or the time unclear. NB. In this case, when you are unable to make the payment in the stipulated period, for example, 2 years, then it is not permissible for you to pay in excess to what you have agreed upon in the beginning as this will then amount to Riba (interest) which is abhorred in the eyes of the Shari?ah. This will draw the curse of Allah upon oneself. The excess that you shall be paying will be in lieu of the extra time taken in completing the payment. This is Riba.

3. The preferred explanation of this Hadith is that ?out of respect and honour? for them, we should not give them space on a narrow road. This does not mean that if you happen to meet them on a wide road, you are free to push them on to one side as this will be tantamount to causing them harm for no apparent reason, whereas we have been prohibited in the Hadith to harm anyone.

4. Yes, this is permissible. Nabi [Sallallaahu Alayhi Wasallam] also gave his armour as guarantee for some wheat he bought.

and Allah Ta’ala Knows Best

Mufti Ebrahim Desai

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This answer was collected from Askimam.org, which is operated under the supervision of Mufti Ebrahim Desai from South Africa.

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