Earning Money through Lending
Economic Issues
Question asked by .
Answered by Dr. Shehzad Saleem

I know that interest is prohibited in Islam. But then, my question is that I want to invest money in the form of a loan and want to earn money through it. The reason is that I want to safeguard my original amount. Is there a way out?


As you have rightly pointed out, interest is forbidden in Islam. The basic reason is that the rights of the borrower and lender are not protected on equal grounds. While the lender is ensured a safe return, the borrower is not and the lender is least bothered with it. This makes the contract an unethical one.

However, there is another way out for a person who does not want to earn money through interest (neither does he want to enter into a profit and loss agreement but wants to earn money through lending: The contract between the lender and the borrower should be made on the basis that the lender gives an undertaking to the borrower that he will be entitled to a percentage share in the profit only if the borrower earns profit on the investment made.

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