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Resolutions of Iftaa' Board

Resolution No.(196): "The Permissibility of Levying Administrative Fees for the Loans Taken from the Governorates Development Fund"

Date Added : 25-11-2015

 

Resolution No.(196)(5/2014) by the Board of Iftaa`, Research and Islamic Studies:

"The Permissibility of Levying Administrative Fees for the Loans Taken from the Governorates Development Fund"

Date: 17/Rabee` Al-Awal/1435 AH, corresponding to 17/2/2014.

 

All perfect praise is due 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:

On the above date, the Board reviewed the letter of the Jordan Enterprise Development Corporation, which reads as follows:

The Governorates Development Fund offers financing through an interest-free loan (Hassan), up to (70%) from the overall cost of the enterprise. The loanee is required to repay in installments over a period of eight years, including a two-year grace period. This is in order to re-use that same amount for financing new enterprises to benefit as many individuals as possible. Moreover, up to (10%) of the enterprise`s profit is deducted in case a profit was produced so as to protect the capital of the Fund to guarantee its continuity, because it is usually used for re-loaning, and no profits are redistributed, or given back to the government. In case of loss, the installments of the interest-free loan are to be repaid, without adding any interest, or profit, and it is possible to delay repayment if the loanee is in a hard up and after examining the reasons for his loss. Based on the afore-said, what is the ruling of Sharia as regards this financing mechanism adopted by the Jordan Enterprise Development Corporation?

After researching and deliberating, the Board decided what follows:

Offering loans to owners of small businesses is an accepted act of charity. It achieves comprehensive development, uproots poverty, increases individual productivity, and helps develop the areas where these enterprises are established.

Therefore, the financing mechanism adopted in the above question is an instance of clear Riba (usury) which has been prohibited by Allah, The Almighty, and His Messenger. It is impermissible for the above Fund to receive a percentage from the profits of the enterprises it finances. However, it is permissible to calculate the actual costs of offering these loans and collecting them, such as salaries of employees, paperwork, rent.. etc. but without the smallest addition, and this could be achieved through imposing a fixed amount of administrative fees. These shouldn`t be tied with the loan`s repayment period, or the enterprise`s profit; rather, they should be tied with the costs necessary for securing the continuity of the Fund, without making any profit by the loaning party. In fact, the Jordan Iftaa` Department, the accredited Fiqh assemblies, and the religious institutions have issued many Facosststwas that permit charging the loanee for the administrative fees of the loan since we believe that it  is the most suitable solution from the perspective of Islamic Sharia. We pray that Allah, The Exalted, Favors us and the Fund`s administrative board with success in serving the community and that their business remains within the boundaries of what is lawful. And Allah Knows Best.

 

Chairman of the Iftaa` Board, The Mufti General of the Hashemite Kingdom of Jordan, His Grace Sheikh Abdulkareem Al-Khasawneh.

Prof. Hayel Abdulhafeez/ Member

Dr. Yahia Al-Botoosh/ Member

His Eminence, Sheikh Sa`ied Hijjawi/ Member

Prof. Mohammad Al-Qudat/ Member

Prof. Abduln`nassir Abu Al Bass`al/ Member

Dr. Mohammad Al-Khalayleh/ Member

Dr. Mohammad Al-Zou`bi/ Member

Dr.Wasif Al-Bak`kri/ Member

Dr. Mohammad Khair Al-Esa

 

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Summarized Fatawaa

Is vomit among the nullifiers of Wudu (ablution)?

Vomit does not nullify Wudu, but it is a Najaasah (impurity) that requires rinsing the mouth and washing whatever became dirty by it since the prayer becomes valid only after the removal of Najaasah. And Allah Knows Best.

Can a woman leading other women in Tarawih prayer recite aloud?

Yes, a woman leading other women in Tarawih prayer is allowed to recite aloud, as long as no non-mahram (other than unmarriageable kin) men can hear her.

What should one do if they see someone deliberately eating or drinking openly during Ramadan?

They must enjoin what is right and forbid what is wrong. If they fear harm from that person, they should disapprove of it in their heart but avoid sitting with them if possible. It is also preferable to seek the help of the authorities to prevent them from doing so.

What is the ruling on selling sacrificial animals (udhiyah) described with specific attributes and authorizing an agent to slaughter them?

Praise be to Allah, and peace and blessings be upon our Master, the Messenger of Allah.
 
Selling sacrificial animals (udhiyah) that are described with specific attributes is permissible. This falls under the category of a salam sale (forward sale) if conducted using the terminology of salam, and under the category of a regular sale if not using the terminology of salam.
 
As for authorizing the seller to slaughter the sacrificial animal, the basic principle is that it is permissible, because the agent (wakil) stands in the place of the principal (muwakkil) in achieving his objective. This is a contract that the principal (the buyer) is entitled to perform himself, so authorizing another (the seller) to do so on his behalf is valid.
 
However, it is a condition for authorization to slaughter that the intention (niyyah) is present either at the time of slaughter or at the time of handing over the sacrificial animal to the agent. The basic principle is that the sacrificial animal must be specifically designated, as it is an act of worship. It is not required to designate it at the time of slaughter; rather, it is valid to do so before that.
 
It is permissible for the principal either to delegate the intention to the agent or to formulate it himself when authorizing the agent to slaughter. However, the sacrificial animal must be designated, even if at the time of slaughter, by the agent.
 
It is obligatory to designate the sacrificial animals so that each person offering a sacrifice receives his own specific animal. Therefore, charitable organizations and companies must take this into consideration and establish a specific mechanism that ensures no mixing of sacrificial animals occurs, so that each person offering a sacrifice receives his own designated animal. And Allah Almighty knows best.

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