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Profit On Investment
I have a scenario based question.
I live in US and my brother in Pak. He needs financial help for his business needs. He gave me an offer that if I give him x amount of money, he would return the principal amount + give me 5 marla plot (free) within few months. Is it halal for me to except that offer or it involves riba since there will be extra burden on him to not only return the principal amount but also 5 marla plot.
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3 Replies
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Profit On Investment
updated 2 years, 7 months ago
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Replies
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Riba is a consideration in a loan transaction. Since your question is about investment, there’s no question of riba.
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What would loan transaction look like in this scenario? This pretty much looks like a loan transaction where one party in need of money is offering to return more than the principal amount. Just using the word investment instead of loan will make it halal? Please elaborate if you can.
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It’s generally not possible for someone else to classify a transaction as a loan or an investment without looking at the contract. It’s between you and the other party to decide whether it’s a loan or an investment.
If it’s a loan, then anything you ask for in addition to principal is riba. If the borrower gives you back something in return with his own free will then there’s no objection on that.
In a business transaction, on the other hand, what needs to be kept in mind is that the transaction should be moral and based on the principle of justice. There’s no question of riba in such a transaction.
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