✿ Written by: Saudi Fatwa Committee (Fatāwā)
❖ Lending with the Intention of Gaining Profit
❖ Question:
What is your opinion regarding a person who lends money to his brother without specifying a time limit, on the condition that he receives a daily amount (e.g., 100 Riyals or more/less) from the goods his brother sells?
❖ Answer:
This condition is invalid (فاسد). It is not permissible for the lender to derive any profit from the loan, whether in the form of:
- Money
- Goods
- Services or benefits
- Rent or compensation of any kind
Because a loan (qarḍ) in Islam is considered an act of benevolence (iḥsān). If any form of compensation or gain is attached to it, the transaction is no longer a loan—it becomes a sale or interest-based transaction (riba).
❖ Clarification through Example
If I say:
“I am lending you 10 Riyals,” then these 10 Riyals are a debt upon you, which you must repay when able—with no addition or condition.
However, if I say:
“I sell you 10 Riyals for 10 Riyals,” and no exchange takes place in the same sitting (majlis al-ʿaqd), this becomes a corrupt transaction (baiʿ fāsid).
❖ Loan is Benevolence, Not Business
Lending is a virtuous deed, aimed at helping others—not a means of earning. The purpose of a loan is to aid, not to generate income like interest-seeking moneylenders.
Islam allows you to lend 10 Riyals, and have exactly 10 Riyals returned, without any addition or benefit in return.
But if a condition is set that the borrower must return more than what was borrowed, such as 12 Riyals instead of 10, then this turns the loan into a commercial exchange and thereby becomes riba (interest).
❖ A Scholarly Principle
The scholars have stated a well-known and beneficial rule:
“Every loan that brings any benefit is riba.”
Reference:
Ibn Bāz – Majmūʿ al-Fatāwā wa al-Maqālāt, 9/244
