Mu' meneen Brothers and Sisters,

As Salaam Aleikum wa Rahmatullahi wa Barakatuh.  (May Allah's Peace, Mercy and Blessings be upon all of you)

One of our brothers/sisters has asked this question:

Why intrest is haram? if i invest mony in a company an i have income that is haram or halal

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Answer:

Why interest is haraam

In the name of Allah, We praise Him, seek His help and ask for His forgiveness. Whoever Allah guides none can misguide, and whoever He allows to fall astray, none can guide them aright. We bear witness that there is none worthy of worship but Allah Alone, and we bear witness that Muhammad (saws) is His slave-servant and the seal of His Messengers.

Allah says in the Holy Quran Chapter 2 Surah Baqarah verse 274-276:

But those who devour ‘riba’ become like the one whom Shaitaan has bewitched and maddened by his touch. They have been condemned to this condition because they say, “Trade is just like ‘riba”, whereas Allah has made trade halaal and ‘riba’ haraam. Henceforth, if one abstains from taking ‘riba’ after receiving this admonition from his Lord, no legal action shall be taken against him regarding the ‘riba’ he had devoured before: his case shall ultimately go to Allah. But if one repeats the same crime even after this, he shall go to Hell, where he shall abide for ever! Allah deprives ‘riba’ of all blessing and develops charity, and Allah does not like an ungrateful, sinful person.

Allah says further in the Holy Quran Chapter 2 Surah Baqarah verse 278:

O Believers!, fear Allah and give up that ‘riba’ which is still due to you, if you are true believers. But if you do not do so, then you are warned of the declaration of war against you by Allah and His Messenger!

Allah says in the Holy Quran Chapter 4 Surah Nisa verse 161:

That they took ‘riba’, although they were forbidden. And that they devoured men’s substance wrongfully. We have prepared for those among them who reject faith a grievous punishment (of Hell Fire)!

Allah Says in the Holy Quran Chapter 3 Surah Ale-Imraan verses 130-132:

130 O ye who believe! Devour not ‘riba’ doubled and multiplied; but fear Allah; that ye may (really) prosper.

131 Fear the Fire which is prepared for those who reject faith.

132 And obey Allah and the Messenger; that ye may obtain mercy.

Your Question: Why intrest is haram?

Beloved brother, the reason ‘riba’ (usury, interest, etc.) is considered haraam in Islam, is because the All-Knowing, All-Wise, Lord Who Created has condemned it as haraam, and absolutely forbidden it for the believers who sincerely believe in Him and the Last Day.

One may very well strive to search and seek the wisdom behind any of the Commands of guidance of their Lord….but regardless of whether one has the intelligence or comprehension to understand the wisdom behind the Command or not, or whether or not one is satisfied or accepts the reasoning behind the Command….the believers who sincerely believe in Allah and the Last Day must adhere and unconditionally believe, trust, obey, follow, and implement every Command of their Lord Creator.

The deen or ‘way of life’ called ‘Al-Islam’ absolutely condemns the concept of the rich amongst the society hoarding their wealth, leave alone increasing their hoarded wealth by doubling and redoubling it through the process of ‘riba’! Those who are bestowed with abundance are guided to invest, and conduct lawful businesses, and also give charity from their wealth, so that the whole society at large may benefit from the circulation of their wealth.

The system or concept of ‘riba’ is invented by the rich in society, so that the rich may get richer at the expense of the poor in society. Regardless of what the one who borrows the money on ‘riba’ does with the loan, the rich is guaranteed a fixed return without absolutely any effort or risk on his part; thus deepening the gap between the haves and the have-nots in society…..!!! This system of ‘riba’ is in the absolute favor of one side at the detriment of the other, and such an abject system of injustice is absolutely condemned and abhorred and detested by The Lord All-Just, All-Merciful.

Islam encourages those who are bestowed with abundance to invest and become partners and shareholders with another in a business or trade dealing….so that if a profit is made in the business, both parties may benefit from it; and if a loss is incurred, both parties share in the loss….thus paving the way for a more just society and environment.

Your Question: if i invest mony in a company an i have income that is haram or halal

Allah says in the Holy Quran Chapter 2 Surah Baqarah verse 275:

….They have been condemned to this condition because they say, “Trade is just like ‘riba”, whereas Allah has made trade halaal and ‘riba’ haraam.

If one invests in a company which deals in a lawful product, then one would in effect be a partner or shareholder in the business which transacts the trade….and trading is an absolutely encouraged source of livelihood in Islam. Because one is a partner or shareholder in the business, one will be well within his rights to enjoy his share of the profits or earnings from the business, and if the business were to suffer a loss, the partner or shareholder will also bear a portion of the loss according to his percentage of shareholding.

Thus in conclusion, if one were to invest money or become a shareholder in a company which deals in a lawful product, or commodity, or service…then the income from this company will be absolutely lawful to the investor.

But if one were to invest their money or become a shareholder in a company which deals with an unlawful product, or commodity, or service (eg. Banks, alcohol related business, gambling or prostitution house, etc.)…then obviously the income from such unlawful trade and services would be unlawful for the believing investor.

If one trusts, obeys, and follows the guidance and commands of Allah and His Messenger (saws), one can be assured of never ever being misled; but if one believes, obeys and follows any other guidance, other than that of Allah and His Messenger (saws), one can be assured of being led astray.

Whatever written of Truth and benefit is only due to Allah’s Assistance and Guidance, and whatever of error is of me alone. Allah Alone Knows Best and He is the Only Source of Strength.

Your brother and well wisher in Islam,

Burhan