A person took a credit and promised to give it back with profit, but he cheated me
Fatwa No: 168541

Question

i lended all of my savings to my muslim friend for his business and he promised to return it with profits. He run away and disappeared with all the money and i realized he cheated me. Since i gave him money with the intention of sharing profits, is there anything wrong with my lending? i already have bank loan for my house but i paid him instead of reducing my loan with the intention to make profits

Answer

All perfect praise be to Allaah, The Lord of the Worlds.  I testify that there is none worthy of worship except Allaah, and that Muhammad, sallallaahu ‘alayhi wa sallam, is His slave and messenger.

If you had lent the money to your friend so that he would return it to you and give you profits and interest on it, then this is a loan with Riba (interest and/or usury) and it is forbidden. Indeed, you are only entitled to your capital money; Allaah The Almighty Says (what means): {But if you repent, you may have your principal-[thus] you do no wrong, nor are you wronged.}[Quran 2:279] Nonetheless, he is obliged to give you back the capital money that you gave to him.

In addition to this, you are both obliged to repent to Allaah The Almighty for dealing with Riba because Riba is a grave major sin.

However, if you had agreed that your friend would invest the money while guaranteeing it for you, then this is a void Mudhaarabah (transaction) and you must invalidate it. In this case, the money will be yours along with the profit and your friend is entitled to the wages of an employee who does the same job like him in the business [which he did].

However, it appears that you lent him the money with the purpose of giving it back to you with interest as we already mentioned and this is Riba.

For more information on deceit and the ruling of dealing with Riba, please refer to Fataawa 130288, 85735, 86136 and 86521.

Allaah Knows best.

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