Is offering someone 7,0 dinars to buy car engines and sell them in the shop, on the condition of earning 10 dinars profit on each engine in addition to the principal, with the installments to be repaid within 4 months, considered usury (riba)?
The transaction mentioned is a form of (profit-sharing partnership) that is impermissible according to for two reasons: First, the Mudarib (the shop owner) guarantees the capital, which invalidates the Mudarabah and transforms it into an usurious loan. Second, a specific amount is designated as profit for the capital owner, whereas the correct approach is for the profit to be a common, shared percentage. For the transaction to be Sharia-compliant, the capital owner should pay the amount to the Mudarib for the car machinery, and the profit should be a common, shared percentage between them, not a fixed, known amount. The Mudarib should not guarantee the capital except in cases of transgression or negligence.
Summary from Ftawy's records · added here
Reviewed by El Fatwa's sharia committee.
Read the full answer on Ftawyhttps://ftawy.com/en/questions/80553
Where this answer came from
- Source platform
- Ftawy
- Original fatwa ID
- 80553
- Added here
- . This is when the answer was added to El Fatwa, not the fatwa's date.
- Text
- Summary from Ftawy's records, reviewed by El Fatwa's sharia committee.
- Read the full ruling
- Read the full answer on Ftawy