Q: Will it be permissible to take a loan from a person and in return, instead of giving them a profit share, could you give them an item of the stock that you will be purchasing with that same loan amount?
Example, you loan R100 000 from a person to buy clothing stock. You agree to pay him on a certain date and then you give him a few items of that clothing.
A: If one takes a loan from someone, then only the loan amount has to be paid back. If anything over and above the loan amount is made a condition to be paid, then this extra amount paid will be riba (interest).
Hence, in this case, if both parties agreed that over and above the loan amount, the debtor will also have to give the creditor some of the stock he purchases with the loan, then this extra amount (i.e. the stock he will give) will be pure riba (interest). Hence, it is not permissible for him to give this extra amount, and nor will it be permissible for the creditor to accept it.
And Allah Ta'ala (الله تعالى) knows best.
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