Is an Indexed Loan Akin to Unlawful Usury?

Answered by Ustadh Tabraze Azam Question: Assalamu alaykum wa rahmatullahi wa barakatuh The other day I was reading about an interest-free loan I was considering on taking. However, they mentioned that the debt would be indexed each year to reflect changes in the Consumer Price Index so that the debt maintains its real value. Thus, […]

Bank Employment: When is it Permissible?

Answered by Mufti Muhammad ibn Adam al-Kawthari Question: As a Muslim am I allowed to work in a bank? Answer: In the name of Allah, Most Compassionate, Most Merciful, The principle concerning employment in a bank (or any other financial institution) is that any work or job that entails being directly involved in interest-based transactions […]

Micro-finance Loans and Riba

Answered by Shaykh Faraz A. Khan Question: I have been using a micro finance website to loan money to small home business owners without capital for business. What I have found recently is that the local micro finance company would charge the business person taking the loan anywhere from 15-25% on top of the original […]

Can I Offer an Incentive When I’m Seeking a Loan?

Answered by Shaykh Faraz A. Khan Question: What is a halal form of offering incentive to a loaner when requesting a loan. I am a small business owner seeking to purchase a building/shop and I am in need of start up money. Everyone is interested in investing in exchange for a continuous percentage of profit. […]

The Rulings of Using Certain Alternative Financing Mechanisms

Answered by Shaykh Faraz A. Khan Question: Is a financing mechanism whereby I purchase assets from a bank, on a murabaha concept of known and stated profit to the seller at deferred payments, and subsequently sell these assets upon taking possession of them, via the bank’s brokerage services or otherwise, permissible?  I have read that […]