What is the ruling of taking benefit from a loan?

What is the ruling of taking benefit from a loan?

Darulifta Ahlesunnat

(Dawateislami)

Question

   What do the scholars of Islam and the Muftis of the Shari’ah say regarding the following matter: I work for a company, and there is an individual who supplies meat to this company. I met him on one occasion, and he said that he supplies meat to the company for an entire month, and he receives an on-going bill from the company. However, he receives the payment at the end of the month. For this reason, he wishes to make the following agreement with me: He will take the bill from the company and give it to me, and whatever the cost comes to, it will be paid by myself. After a month, when he is paid by the company, he will then return the amount of money he took from me, and in addition to this, he will give me Rs. 10 per kilo of the meat he supplies. Is this arrangement correct in light of the Shari’ah?

بِسْمِ اللہِ الرَّحْمٰنِ الرَّحِیْمِ

اَلْجَوَابُ بِعَوْنِ الْمَلِکِ الْوَھَّابِ اَللّٰھُمَّ ھِدَایَۃَ الْحَقِّ وَالصَّوَابِ

   The method described in the aforementioned situation is nothing, but  Riba (interest). As such, you cannot adopt this method. This is because according to the Shari’ah, the money that you will give to that individual is considered a loan. Meaning, you will give that individual money as a loan, and the principle regarding loans is that the amount to be returned should be exactly as the borrowed amount. If the repayable amount is set to be higher than the borrowed amount, this will be considered interest. Taking and giving money in this manner is unlawful (Haraam) and impermissible.

وَاللہُ اَعْلَمُ عَزَّوَجَلَّ وَرَسُوْلُہ اَعْلَم صَلَّی اللّٰہُ تَعَالٰی عَلَیْہِ وَاٰلِہٖ وَسَلَّم

Written by: Mufti Muhammad Qasim Attari