Assalaamu Álaykum Wa Rahmatullaahi Wa Barakaatuhu
Hereunder is the reply to your query.
The Sharée relationship between CCC, the consumer and the merchant must be
examined before determining the validity of the transaction. The
relationship between CCC and the consumer is of a lender and borrower. This
is apparent from the first paragraph of the document where the CCC
undertakes to provide finance to the merchant’s customers and settle the
merchant’s invoice. It is obvious and known that the consumer will pay the
CCC a bigger amount over an extended period of time. Therefore, this will be
interest being paid on a loan. Hence this is not permissible.
The relationship between the consumer and the merchant is that of buying and
selling. However, since it is established that the relationship between the
CCC and the consumer involves transacting in interest, it is not correct for
the seller (merchant) to accept payment of the CCC. This will be aiding in
sin and not permissible. In fact, it will not be permissible to even enter
into a deal of buying and selling due to the condition of arranging finance
with the CCC who will charge the consumer interest. The Fuqahaa have stated
that any condition contrary to the Shariáh made in the actual deal nullifies
As an alternative, if the CCC transforms its principles and conforms with
the principles of Muraabaha, wherein the CCC purchases the item from the
merchant and sells it to the consumer on a higher fixed price, this would be
And Allah Taãla Knows Best.
Mufti Ebrahim Desai