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Getting Income on a Loan

Answered as per Hanafi Fiqh by CouncilofUlama.co.za

Q: Can a Muslim lend money to the needy for business and take some part of his income as benefit for lending money?

A: To invest money in the business and then to receive a fixed monthly return irrespective of whether the business  generates a profit or not will not be correct; this will be considered interest.

To make this transaction acceptable you need to become a virtual partner in business (active or inactive) i.e. if business generates a profit you will benefit; if the business loses you will lose, if  the capital of the business depreciates your investment will depreciate and if it appreciates, it will be in your favour.

And Allah Knows Best

Aadiel Moosagie (Mufti)
Council of Ulama Eastern Cape
Tel/Whatsapp: +27 83 982 6968
[email protected]

This answer was collected from CouncilofUlama.co.za, which is operated under the supervision of Council of Ulama Eastern Cape, South Africa.

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