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Can I Take a Loan From the Bank To Make an Investment in a Business?

Answered as per Hanafi Fiqh by DarulIftaBirmingham

Answered by: Maulana Syed Johir Miah


Can I take a loan from the bank to make an investment in a business?

In the name of Allah, the Most Gracious, the Most Merciful



It is haram to take out an interest-based loan from the bank. Interest is haram in Islam, no matter what.

ALLAH swa says in the Quran:

ٱلَّذِينَ يَأۡكُلُونَ ٱلرِّبَوٰاْ لَا يَقُومُونَ إِلَّا كَمَا يَقُومُ ٱلَّذِي يَتَخَبَّطُهُ ٱلشَّيۡطَٰنُ مِنَ ٱلۡمَسِّۚ ذَٰلِكَ بِأَنَّهُمۡ قَالُوٓاْ إِنَّمَا ٱلۡبَيۡعُ مِثۡلُ ٱلرِّبَوٰاْۗ وَأَحَلَّ ٱللَّهُ ٱلۡبَيۡعَ وَحَرَّمَ ٱلرِّبَوٰاْۚ

Those who consume interest cannot stand [on the Day of Resurrection] except as one stand who is being beaten by Satan into insanity. That is because they say, “Trade is [just] like interest.” But Allah has permitted trade and has forbidden interest.[1]

Jabir (رضى الله عنه) said that Allah’s Messenger (ﷺ) cursed the accepter of interest and its payer, and one who records it, and the two witnesses, and he said: They are all equal.[2]

عَنْ جابِرٍ، قالَ: لَعَنَ رَسُولُ اللهِ ﷺ آكِلَ الرِّبا، ومُؤْكِلَهُ، وكاتِبَهُ، وشاهِدَيْهِ»، وقالَ:هُمْ سَواءٌ

Therefore, my advice would be to get an interest-free loan from family and friends, if possible, and then use it for the purpose of the business.

Only Allah Knows Best

Written by Maulana Syed Johir Miah

Checked and approved by Mufti Mohammed Tosir Miah

Darul Ifta Birmingham

[1] Surah Baqarah, Ayah 275

[2] Sahih Muslim, Hadith 1598, 1219/3, Dar Ihyat Turath, Beirut, Lebanon.

This answer was collected from DarulIftaBirmingham.co.uk, which is run under the supervision of Mufti Mohammed Tosir Miah from the United Kingdom.

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