Interest in investment-participative loan : participatory loans

السؤال

[Question one] : Salam Alaikoum dear professor Dr. Monzer, My name is Shu'ayb and through the internet I came in contact with you. It was a pleasure to meet you in Doha for 8th international conference on Islamic economics and finance (December 2011). I am addressing to you for an advice about the Islamic ethical view related to "the business owner-investor financial relationship". I attended several seminars and read several books about Islamic ethics in finance. I come to you then for advice request. My brother Mohammed has just founded his own business in the ICT sector in Brussels (Europe). He is at a stage now where some investors (public) are willing to invest available funds in the development of his business. The common investment method here is very specific. It is called : "Participative loan". Definition of a participative loan : Amount granted by a financial investor in a company where the investor shares with the business owner the risk of bankruptcy. -If the company goes bankrupt : the investor accepts to lose his investment and any remuneration related to it. -If the company makes profits : the investor is asking a remuneration related to its loan (fixed rate related to the participative loan). Maybe this term requires some modification to be Shari’ah compliant. Definition of Riba : -From the etymological point of view, the term Riba comes from the verb Raba and Arba means to increase and enhance a thing from itself. -From the legal point of view, we can define Riba as any benefit or surplus that will be perceived by one of the parties without any acceptable and legitimate compensation in terms of Islamic law. Or rather an increment in a debt (when rescheduled) or loan. In this case, the participative loan allows to make equal the investor and the business owner in front the bankruptcy risk of the company. The investor will be paid on its investment if the company makes profits. This risk sharing is the counterparty to pay the investor. This method of investment, usually from local state funds, participates positively in my opinion the creation of enterprises. Could you please from your knowledge tell me if this method is suitable for our Muslim ethics and tell me what the related legal arguments are ? See the attachment "Participative_loan.docx". Do not hesitate to contact me to discuss further. I am available for any questions. Thank you in advance for your help. [Question two] : First of all, I thank you very much for your answer. Your knowledge is very important and I thank you for sharing it. Here as below the asked details about the "participative loan". This kind of investment is really close to our Islamic ethics. The structures proposing this kind of partnerships are mixed private-state funds that have as an objective to encourage the business creation. Principles : 1. The business risk is shared between the investor and the business founder. 2. The remuneration for the investor : -If losses : no remuneration should be forecasted ; -If profits : fixed interest rate linked to the invested capital (and not according to the volume profits). You can find attached to this e-mail an example scenario (basic case) : see the attachment “participative loan scenario.xlsx". The main funds structures (public-private owned funds) that are proposing these participative loans (investments) here in Brussels : 'funds de participation' and 'Brustart'. http://www.fonds.org and http://brustart.be. Could you please indicate me if this financial partnership model is really Shari’ah compliant (or which are the possible other conditions). This would help me in the funds raising to develop my ICT technologies startup here in Brussels. May Allah help us with this ? I thank you in advance for your help. I am available for any required information about this kind of financial partnership. Peace and brotherhood, Chaib

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تاريخ النشر

2013-02-15

التخصصات الرئيسية

العلوم المالية و المحاسبية
الأديان
الدراسات الإسلامية

الموضوعات

• الفقه الإسلامي
• العقود
• الأرباح
• الاستثمارات
• القروض
• أصحاب الأسهم
• الربا
• شركات الأشخاص
• المصارف التشاركية

عدد الصفحات

3

نوع البيانات

فتاوى

لغة النص

الإنجليزية

رقم السجل

BIM-730626

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• AMA