What is the ruling on lending a company a sum of money in exchange for a fixed annual return (15%), whether profit or loss?
Source: FtawySummarized from the full answer at Ftawy · imported Sep 2, 2026
A loan (qard) is lending money with the condition that it be returned without increase or decrease. Any increase is usury (riba), and any decrease is impermissible because the borrower guarantees the principal. As for partnership (qirad/), it is when you give money to someone to invest it, and you have a pre-determined percentage of the profit (not the principal). If a loss occurs, it is borne by the principal, and the agent (mudarib) does not guarantee the principal. Anything contrary to this is prohibited by Islamic law.
Summarized from the full answer at Ftawy · imported
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