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Profits stipulated in proportion to the investment

Q: I live in a non-muslim country and I am paying loans with interest. I came by an article where you can invest money and get double or triple profit after two or three months. As per the article the investment goes in real estate transactions. Is such investment permissible? If the profit is considered as riba can such money be used to repay my loan which am already paying with interest?

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A: In Islam, it is not permissible to stipulate the profits in proportion to the investment. Hence, if it is stipulated that one will receive double or triple profits on ones investment after two or three months, it will be impermissible to invest in such an investment.

And Allah Ta’ala knows best.

(و لا يجوز الشركة إذا شرط لأحدهما دراهم مسماة من الربح) لأنه شرط يوجب انقطاع الشركة فعساه لا يخرج الا قدر المسمى لأحدهما (هداية 2/632)

 

Answered by:

Mufti Zakaria Makada

Checked & Approved:

Mufti Ebrahim Salejee (Isipingo Beach)

This answer was collected from MuftiOnline.co.za, where the questions have been answered by Mufti Zakaria Makada (Hafizahullah), who is currently a senior lecturer in the science of Hadith and Fiqh at Madrasah Ta’leemuddeen, Isipingo Beach, South Africa.

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