Mudhaarabah

We wish to know what you have understood thus far of mudhaarabah and who is practising it and how. The gist of mudhaarabah is that finance is forwarded by one person and the other is the active partner. Thereafter the profits are distributed between the both according to the arranged percentage.

And Allah Ta`ala knows best

Q: There was a group of people mostly people who were very near to Islam. The conditions were, If someone gives 100000 of that country currency they will give 8000 each month to that person. Still sometimes this profit can be change to 7000 or more near to 8000 but their amount which they deposited (100000) will be the same. Also they can take their installed money at any time. These days the person who was the head of this (business) has flown away with unlimited money. So in the above case, is it permissible or not?

A: No, it is not permissible.

And Allah Ta`ala knows best

Answered by:

Mufti Ebrahim Salejee (Isipingo Beach)