Fatwa: # 15909
Category: Business Matters
Country: United Kingdom
Date: 23rd November 2007

Title

If somebody lends a large amount of money to someone how can the lender benefit from this?

Question

If somebody lends a large amount of money to someone how can the lender benefit from this?

Answer

In the name of Allah, Most Gracious, Most Merciful  

Assalaamu `alaykum waRahmatullahi Wabarakatoh

Your question is unclear. Our understanding is that person A gives person B a loan. Since person A cannot charge person B a premium over the capital loan, how else person A can benefit.

If our understanding is correct, Person A may enter into a Mudarabah agreement with person B. Mudarabah is a transaction in Shariah, were one partner offers the finance and other partner uses his skill and expertise. The person giving the finance (non active partner) is called the Rabbul Maal and the active partner is called Mudarib. The Mudarib will be required to invest the money and the profits accrued from the investment will be shared between the Rabbul Maal and Mudarib at a ratio agreed by both parties. The Rabbul Maal (financier) will receive his capital whereafter the profits will be distributed.

Since we do not know the actual reason why person B wants the money, we cannot advise. The above is just a possible alternate that may be used. However, if you forward us the actual reason for the loan, we will design the contract to suit a Halaal return for person A.

And Allah knows best

 

Checked and Approved by:

Mufti Ebrahim Desai
Darul Iftaa

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