Does the method used by the Orphan Fund Development Foundation for selling goods by installment and Murabaha involve usury?

Caring for orphans and investing their funds is a righteous and permissible act, and it falls under the guardianship of orphans, for which a great reward has been mentioned. As for trading with the orphan's money, it is permissible if their funds are invested in a way that benefits them. It was reported from Umar, may Allah be pleased with him, "Seek out profit with the orphans' money so that zakat does not consume it."

The described scenario is Murabaha for the one who commands the purchase, and it is permissible under two conditions:

1. The institution must own the commodity and purchase it with a true purchase before selling it to the client. 2. The institution must take actual possession of the commodity before selling it to the client, and possession of each item is according to its nature.

If either of these two conditions is not met, the transaction becomes forbidden, because not genuinely purchasing the commodity is considered a usurious loan, and selling a commodity before taking possession of it is forbidden by Islamic law. The Islamic Fiqh Academy has issued a fatwa permitting Murabaha in this form if these conditions are met.