Does the proposed formula—a 20% increase or decrease from the amount invested in trade to avoid usury—still fall within the realm of usury? And what is the correct method for that?
Source: FtawySummarized from the full answer at Ftawy · imported Sep 2, 2026
An investment agreement that guarantees capital or adds a fixed percentage of profit to it is not permissible.
The correct method for an investment agreement is to stipulate that the profit percentage is derived from the actual realized profits. In the event of a loss—provided there is no transgression or negligence—it is borne by the capital. This makes the partnership valid.
Such a partnership is permissible, as stated by Al-Khiraqi and Ibn Qudamah.
Summarized from the full answer at Ftawy · imported
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