Fatwa No : 85472
How to Compensate for a Loss in the Case of a Loan?

How to Compensate for a Loss in the Case of a Loan?

Respected Sir, An envelope has been sent to you in your esteemed service, which contains three similar fatwas along with their answers. One fatwa and answer is from your Darul Ifta, and the other two answers are from Darul Uloom Korangi and Jamia Binoria Town. Almost all three answers are alike. Now I humbly request you to kindly consult with the honorable Muftis and guide me towards any Shariah-compliant way for compensating my financial losses.

الجوابُ حامِدا ًو مُصلیِّا ً

Once the questioner has given the said amount as a loan, then after that it is not permissible in Shariah to take any kind of profit on that amount (whether in the form of cash or in the form of other items, etc.), as it falls under the ruling of interest (riba), from which abstinence is obligatory.
Furthermore, since giving this loan is undoubtedly a virtuous act, a voluntary charity, and an act of kindness, for which there is no doubt about attaining reward, then this itself is indeed a profit — but it is a matter of the Hereafter, whose value and importance will only be realized later. Therefore, one should not demand worldly profit in return and thus waste the reward of the Hereafter. However, if in the future one wishes to give someone financial assistance while also intending to avoid possible loss, then there is leeway to purchase the required item for the borrower and sell it to him on installments with a suitable profit added.

مأخَذُ الفَتوی

کما فی الھندیة: قال: "ومن اشترى غلاما بألف درهم نسيئة فباعه بربح مائة ولم يبين فعلم المشتري، فإن شاء رده، وإن شاء قبل"؛ لأن للأجل شبها بالمبيع؛ ألا يرى أنه يزاد في الثمن لأجل الأجل، الخ (3/58)۔