Is Investing in a Business for Fixed Monthly Returns Halal?

Understanding Shariah Compliance in Business Investments

Question: A woman has two children who are orphans. She has remarried but does not want to burden her husband with the children’s school and tuition fees. The children’s aunt has given approximately four lakh rupees from Zakat and Sadaqah. The woman wants to invest this money in her brother’s business and has asked her brother to send her thirty thousand rupees monthly for the children’s fees. Her brother has agreed and said that she can take back all her money whenever she needs it. Is this method correct?

Answer: Investing money in a business and taking a fixed profit in this manner is not permissible, as it falls under the category of interest (Riba). According to Shariah, profits should be determined based on the business’s gains and losses. It is not permissible to take a fixed monthly amount as profit because business profits can fluctuate. For example, it is permissible to agree on taking a percentage of the profit, such as ten or fifteen percent, but taking a fixed monthly amount as profit is not allowed.

 Sheikh Maqbool Ahmed Salafi (Hafizahullah)

❪Jeddah Dawah Center, Hayy Al-Salamah – Saudi Arabia❫