Back to search
The question

What is the ruling on dealing with a company that recycles waste and extracts raw materials from it and sells them, with the investor receiving a share of the profits ranging from 8% to 14%?

Share this answer

Source: FtawySummarized from the full answer at Ftawy · imported Sep 2, 20261 min readAlso available in العربية
The answer

The described transaction involves a problematic aspect, as it states that the website gives the subscriber 20 euros (100 kg of waste), and the processed materials are sold at a price of 0.40 euros per kilogram. However, the problem lies in the recycling mechanism mentioned on the website, where the subscriber presses a recycling button to receive 6% of the initial purchase value, and then 8% of the difference between the selling price of the pellets and the selling price of the processed materials.

This appears to be a fixed percentage on capital, where you pay 100 and receive 14% on it per month or in five weeks, while the commodity (waste) remains in its place. This is clear usury (riba).

The transaction is in reality a series of fictitious, repeated sales of a single item, and its true nature is a fixed interest on capital, which is Islamically prohibited. Legitimate investment must have profits as a common share of actual earnings, not from the capital itself, and the capital should not be guaranteed. Otherwise, this becomes a stratagem for usurious loans.

Summarized from the full answer at Ftawy · imported

Read the full answer on Ftawy
Source platform
Ftawy
Original fatwa ID
17215
Imported
Translation status
Source text, unreviewed
Read the full ruling
Read the full answer on Ftawy