Subject : Any Addition to the Original Amount of Loan is Riba
Fatwa Number : 2026
Date : 07-05-2012
Classified : Usury (interest) &Loans
Fatwa Type : Search Fatawaa

Question :

To finance small enterprises, the Ministry of Social Affairs gave ten thousand JDs to a women`s society to be loaned to women. It is worth pointing that the latter want the loans in cashRiba, but the Ministry stipulates (5%) as Murabah in return for each loan. Is this transaction permissible?

The Answer :

All perfect praise be to Allah the Lord of the Worlds. May His peace and blessings be upon our Prophet Mohammad and upon all his family and companions.

Every loan conditioned with an addition, small or big, is usury. The evidence on this is the widespread Sharia maxim, which states: "Every loan which derives a benefit is Riba (Usury/Interest)." Moreover, there is no lawful excuse for dealing in Riba. This is because Allah the Almighty Says (What means): "O ye who believe! Fear God, and give up what remains of your demand for usury, if ye are indeed believers. f ye do it not, Take notice of war from God and His Apostle: But if ye turn back, ye shall have your capital sums: Deal not unjustly, and ye shall not be dealt with unjustly." {Al-Baqarah, 278-279}.


In conclusion, the form of transaction given in the above question is forbidden usury. The evidence on this is that Jabir said that Allah's Messenger (PBUH) cursed the accepter of interest and its payer, and one who records it, and the two witnesses, and he said:

They are all equal." {Related by Muslim}.

Therefore, we advise those in charge of the above society, Ministry and the staff therein to be conscious of Allah the Almighty and use Murabah contract as stipulated in Sharia to avoid resorting to usurious transactions. And Allah the Almighty Knows Best.



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