Investement fixed returns on rent/lease

Mu' meneen Brothers and Sisters,

As Salaam Aleikum wa Rahmatullahi wa Barakatuh. (May Allah's Peace, Mercy and Blessings be upon all of you)

One of our brothers/sisters has asked this question:

recently i gave some money to a friend of mine for investment. with the money he bought some machinery and gave out the same machinery to some companies on lease/rent. in return this friend of mine give me a fixed sum(say Rs.2000/-) every month as return. is this money halaal or haraam.

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It all depends on the agreement made between the two parties. If you have given the money and your friend bought the machines to let/lease/rent and he gives you Rs. 2000/- every month irrespective whether the machinery is rented or lying un-rented then that income will be deemed haraam.

But if your friend used your money to buy the machinery and whatever rent he received he shared it with you on a pre-agreed percentage then that income would be halaal.

The difference between the two transactions are that the first transaction income is fixed and your friend is paying you a fixed return like the conventional banking system, making it haraam and the second transactions income is as per market conditions and liable to fluctuation wherein both of you will receive according to the agreed percentage. Here your friend is not bound to pay anything if the machinery is not rented for any reason. This type of transaction is fair and will be deemed halaal.



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Your brother and well wisher in Islam,

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