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Unethical Nature Of Principal-Secured Financing
in Sir Ghamidi’s view their is no problem in “in principle saved financing”, how ever Mufati Taqi Usmani in his book “Islamic Economics” quotes that (الربح على ما اصطلحوا عليه والوضيعة بقدر رأس الـمال) sharing profit and lose is indeed Islamic view of partnership and he says that the mentioned statement in arabic is indeed قاعده فقهی jurist principle for business. my question is that ” how sir Ghamidi views that there is no problem in principle saved financing.”
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6 Replies
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Unethical Nature Of Principal-Secured Financing
updated 1 year ago
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6
Replies
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Both the statements are inferrence of Fuqaha, not a Nass. To share profit and loss, and to share profit only with principal amount secured and ensured, both are ethical sound. The objection arises when there is something unethical. Ghamidi saheb find it ethical and it is ethical to do business with the condition that the principal amount will be secured and ensured. In this era when the investor in many instances are not directly involved in the business and they do not know what is happening in the business, this principle, as indicated by Ghamidi saheb is a way to secure them from loss of their principal amount. The investor will not demand profit in case of loss in the business but deserve to have his principal amount back.
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Dear Dr. Irfan Shahzad could please elaborate the Fuqaha whom “infer to share profit only with principle amount secured”.
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Thank you Dr. Irfan Shahzad, but still it is confusing if one party face loss and another party share nothing in loss how could it be ethical? is not the statement is more ethical?
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As far as the principal amount is concerned, justice dictates that the one who has made the investment and is not part of the business strategy and not overseeing the day-to-day business operations (i.e. is a sleeping partner), should have a right on his principal amount in case of a loss. This arrangement would however be unjust if an active investor demands principal-secured financing arrangement despite being actively involved in the operations of the business.
For comments of Ghamidi Sahab:
Please refer to the link below from 1:08:26 to 1:10:00
https://www.youtube.com/live/6IFA34jO72I?feature=share&t=4106
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Please also refer to the video below from 1:12:18 to 1:21:26
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Thank you so much Mr. Umer Qureshi and Dr. Irfan Shahzad for the response, could you please point out those jurists (فقها) that inference to the second statement (Sharing only profit not loss) is also ethical.
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There is no jurist in my knowledge who could point out this in the discourse of Fuqaha.
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