Is a Loan in Which the Loan Giver or Taker Receives Profit Allowed?
Hanafi Fiqh
Answered by Mawlana Ilyas Patel
Question
I’ve been frustrated to see different apps lending people money with interest (riba) and destroying their lives. As a developer, I see myself who can overcome this. My question is, is it halal if the person who’s investing in my app or giving a loan is directly giving it to the taker and the giver is getting profit from the money that is made from advertisements? If it’s not halal, then what if I also give some profit to the loan taker?
Answer
I pray you are in good faith and health. Thank you for your question. Allah Most High reward you for your enthusiasm and lofty intention, amin.
This will be impermissible if the loan generates profit for the taker and giver in both scenarios, where the loan giver is receiving profits from the advertisements and the loan taker from the application developer.
There is a juristic principle: it is not permissible to derive any benefit from a loan. It has been reported by Ibrahim, in a halted-chain report (mawquf), “Every loan that draws a benefit has no good in it.”
A halted-chain report (mawquf) is a statement, or the like, narrated from a companion, whether continuous or severed. [Ibn Mulaqqin, Al-Tadhkirah]
[Ibn Abi Shayba, Musannaf Ibn Abi Shayba]
I would like you to go through the valuable answers and links below. You will receive guidance and direction in sha Allah.
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[Mawlana] Ilyas Patel
Checked and Approved by Shaykh Faraz Rabbani
Mawlana Ilyas Patel is a traditionally-trained scholar who has studied within UK, India, Pakistan, Syria, Jordan and Turkey.
He started his early education in UK. He went onto complete hifz of Qur’an in India, then enrolled into an Islamic seminary in UK where he studied the secular and Alimiyyah sciences. He then travelled to Karachi, Pakistan.
He has been an Imam in Rep of Ireland for a number of years. He has taught hifz of the Qur’an, Tajwid, Fiqh and many other Islamic sciences to both children and adults onsite and online extensively in UK and Ireland. He was teaching at a local Islamic seminary for 12 years in the UK where he was a librarian and a teacher of Islamic sciences.
He currently resides in UK with his wife. His personal interest is love of books and gardening.
