Date : 15-03-2020

Question :

Is it permissible to take brokerage fees for helping someone to borrow a certain amount of money from someone else, knowing that the borrowed amount is to be paid off without any addition?

The Answer :

Praise be to Allah, The Lord of the Worlds.

Taking a brokerage fee for helping someone to borrow a certain sum from someone else is classified, according to Islamic Jurisprudence, under Ju`alah, which is taking a certain amount against delivering a certain task.

This transaction is considered an act of mediation between borrower and lender in return for a commission, and this is permissible according to Shafie and Hanbali jurists. It is stated in al-Shirbini`s book "Moghni al-Mohtaaj, V.3, P.35", "If he told someone, "Help me borrow a hundred and take ten as a commission," then the latter is Ju`alah." Also check the book "Kha-Shaaf Al-Khina`, V.3, P.319" by Al-Bahooti.

In conclusion, it is permissible to take a commission for mediating between a borrower and a lender provided that the loan contract complies with the stipulations of Sharia, the commission is specified before the middleman does his part, and the task (Mediation) is accomplished. However, when the middleman fails to perform his task, he isn`t entitled to receive the commission. Moreover, it is prohibited to mediate for a usurious loan. And Allah The Almighty knows best.