Would it be considered usury for a project to support small businesses by providing raw materials and covering salaries, bills, and obligations for their owners, on the condition that the amount be repaid in installments after eight months, with a penalty for late payment, given that this support is not offered to businesses that have already commenced their operations?
The contract mentioned between the financier and the project owner is an usurious loan stipulated with interest upon delayed payment. This is precisely the usury of Jahiliyyah (pre-Islamic era) which the Quran and Sunnah have forbidden. The Fiqh Academy has issued a fatwa prohibiting obligating the debtor to any increase on the debt upon delayed payment of installments.
Summarized from the full answer at Ftawy · reviewed Sep 2, 2026
Read the full answer on Ftawyhttps://ftawy.com/en/questions/46812