Is It Haram to Approve Payments from a Company Credit Line with Interest?
Answered by Shaykh Muhammad Carr
Question
I work in a role where I approve payments from a company credit line with interest, encourage clients to use factoring with interest, and respond to inquiries about letters of credit with interest. Is any of this considered haram and related to riba?
ِAnswer
In the Name of Allah, the Most Merciful and Compassionate.
I pray you are in good faith and health. Thank you for your question.
All of the above are considered haram and are related to riba. The Messenger of Allah (Allah bless him and grant him peace) cursed those who take an interest, those who give it, document the transaction, and witness it. He said, ”They are all the same.” [Muslim]
Encouraging clients to use factoring with interest and responding to letters of credit amounts to assisting in sin and transgression. This is prohibited. [Quran, 6:2]
Severity of Riba
Islam unequivocally prohibits usury (riba), as highlighted in the verses of the Noble Quran and the Sunna of the Master of the Messengers (Allah bless him and give him peace).
Allah (Most High) says:
“O believers! Fear Allah, and give up outstanding interest if you are (true) believers. If you do not, then beware of a war with Allah and His Messenger! But if you repent, you may retain your principal—neither inflicting nor suffering harm.” [Quran, 2:278-279]
And with Allah alone is our success.
[Shaykh] Muhammad Carr
Checked and Approved by Shaykh Muhammad Abu Bakr Badhib
Shaykh Muhammad Carr has dedicated his life to studying and transmitting our beautiful deen. His studies have taken him around the globe, where he has benefitted from many luminaries. Under the guidance of his teachers – Shaykh Taha Karan, Shaykh Yaseen Abbas, Shaykh Muadh Ali, and many others – Shaykh Muhammad has grown to appreciate the beauty and benefits of diverse scholarship. He completed his memorization of the Qur’an at Dar al-Ulum Zakariyyah in September 1997 and received an Alimiyya Degree in 2006 from DUAI (Darul Ulum al-Arabiyyah al-Islamiyyah). He is also affiliated with Masjid Auwal in Bo Kaap, Cape Town (the oldest mosque in South Africa), where he serves as a co-imam, and Dar Al-Safa, where he has taught since 2018. As a teacher, he imparts the wisdom of our heritage and tradition by opening the door for students. As an imam, he has the unique opportunity to serve his community in daily life.
In addition to his roles as a teacher and imam, Shaykh Muhammad Carr has contributed significantly to the administrative and advisory aspects of Islamic institutions. Since 2023, he has served as the Administrative Director at The Imam Kurani Institute, contributing to the institution’s growth and development. He continues to pursue traditional Islamic Sciences, possessing a keen interest in Islamic Contract Law and Finance. Shaykh Muhammad has been a Shari’ah Board Member for Islamic Asset Management & Insurance Companies since 2001, aligning financial practices with Islamic principles.
