Interest In A Non-Muslim Country
Q. 1. “The finance Company is asked by clients for Machinery, Cars, Equipment, etc on credit. Can it purchase these and other items by cash or credit and then sell them at either 20%, 30% or 40% profit in conformity to payments period and mutual agreement. Is the above form of contracts permissible or not? The above stated percentage of profit are to be paid in cash by the client while the balance is paid over agreed terms.
(Y.Loonat, Mozambique)
A. The proposed transaction is called Murabaha and it can be permissible in Shari’ah subject to the following conditions: