Can I Assist a Franchisee in Securing a Loan From an Advisor?

Answered by Mawlana Ilyas Patel

Question

I hope you’re doing well. I have a finance question. Currently, we are operating a fast-food franchise system where I, as the franchisor, grant the rights to our brand name, and the franchisee must invest in the business.

We have potential interested parties who do not have the capital upfront and require a loan. I wonder if assisting them in securing financing, such as helping with the creation of a business plan or recommending a financial advisor, could potentially be sinful.

Answer

In the Name of Allah, the Most Merciful and Compassionate

It is not permissible for you to refer the franchisee to a financial advisor that provides interest-based loans.

This will come under assisting in sin. Allah Most High says, “Cooperate with one another in goodness and righteousness and do not cooperate in sin and transgression. And be mindful of Allah. Surely Allah is severe in punishment.” [Quran, 5:2]

In the Hanafi school, the degrees of assisting another in sin are:

Direct assistance in sin.

Indirect assistance in sin.

A possible cause for sin. [Ibn ‘Abidin, Radd al-Muhtar; Nahlawi, Durar al-Mubaha; Usmani, Fiqh al-Buyu‘]

I would like you to go through the valuable answers and links below. You will receive guidance and direction insha’ Allah.

Check this also:
Is it Permissible to Refer Customers to Mortgage Brokers? – SeekersGuidance

Why not begin your search for knowledge by signing up for a course on
(seekersguidance.org)?

I pray this helps answer your question.

[Mawlana] Ilyas Patel
Checked and Approved by Shaykh Faraz Rabbani

Mawlana Ilyas Patel has received traditional education in various countries. He started his schooling in the UK and completed his hifz of the Quran in India. After that, he joined an Islamic seminary in the UK, where he studied secular and Aalimiyya sciences. Later, he traveled to Karachi, Pakistan, and other Middle Eastern countries to further his education. Mawlana has served as an Imam in the Republic of Ireland for several years and taught the Quran and other Islamic sciences to both children and adults. He also worked as a teacher and librarian at a local Islamic seminary in the UK for 12 years. Presently, he lives in the UK with his wife and is interested in books and gardening.