Date : 06-08-2017

Question :

Is it permissible for the financer to collect Murabaha (Resale with a stated profit) against conducting Feasibility studies?

The Answer :

All perfect praise be to Allah, The Lord of The Worlds, and may His peace and blessings be upon our Prophet Mohammad and upon all his family and companions.

Feasibility studies are normally conducted by specialized individuals who charge a certain wage against their efforts and expertise in that field. Therefore, this wage goes under the Islamic term "Ijarah" (Hiring), which is an independent contract by which a certain benefit is possessed against a rent. Accordingly, if the wage collected against the feasibility studies was detached from any other contract, then it is valid in case the Sharia conditions in that regard were met, and thus there is no harm in collecting a wage against providing that benefit.

Therefore, since the financer offers a certain service to the client (Financed) then there is no harm in collecting a wage in return for that service. This is particularly since such studies aim to ascertain that the project is going well and that the capital serves the purpose for which it was taken in the first place. However, it is conditioned that the studies should be serious, real and not just a technicality.

Nonetheless, if the studies were meant to finance a goodwill loan then collecting any profit against them isn`t permissible. Rather, the wage should equate the actual cost of the studies so as to avoid falling into Riba (Usury/interest).