Ruling on Pledging Fruit-Bearing Assets and Land as Collateral (Rahn)

✿ Written by: Saudi Fatwa Committee (Fatāwā)

❖ Pledging Fruit-Bearing Property Like Dates and Grapes​

There is no harm in using fruit-bearing assets, such as date palms or grapevines, as collateral (rahn). However, the following conditions apply:

• The ownership of the fruits and trees remains with the original owner (rāhin).
• The lender (murtahin) is not permitted to benefit from the produce.
• He may only deduct the value of the fruit from the loan amount, if agreed upon at the time of repayment.

But to consume or benefit from the produce while the loan still exists, without it being deducted from the debt, is considered ḥarām and riba (interest).

❖ Ruling on Land Used as Collateral​

If land is pledged as security:

• The lender cannot take rent from the land,
• Unless it is deducted from the outstanding debt at repayment.

❖ Statements of the Companions​

A group of Companions of the Prophet ﷺ disapproved of taking any benefit (e.g., fruit, rent, or goods) in exchange for delaying repayment, and considered this to be a form of riba.

❖ Permissible Excess at Time of Repayment​

If, at the time of repayment or afterward, the debtor voluntarily gives something extra, it is permissible, as long as it was not stipulated in the contract.


The Prophet ﷺ said:


“Indeed, the best of people are those who repay in the best manner.”
(Sunan Abī Dāwūd, Ḥadīth no. 3346)

Reference:
Ibn Bāz – Majmūʿ al-Fatāwā wa al-Maqālāt, 19/310