Islamic Finance – Part 8
Channel: Hacene Chebbani
Series: Hacene Chebbani – Islamic Finance
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Mudarabah by Sheikh Hacene Chebbani
Episode Transcript
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By line Amina salatu salam our city, so you know, Mohammed
said he was sorry he may
say today inshallah, who will be talking about the contract to from Oh Baba. It's another type of partnership.
And it is also called El pirot. It is called the karate in the language of the people of all ages,
and Morocco and Medina. And it is called the MOBA in the language of the people of Iran, Iraq, the people of Iraq.
And it is one one partner give some money to another one, to invest it in a commercial enterprise. And they make an agreement to share the profit between them.
So he doesn't pay him a salary.
And no one is entitled to any specific amount of money, but they share the profit between them.
This is basically the structure of an modaraba. So two people come together, they don't have to be individuals, sometimes you have nowadays banks are acting as a Mubarak, and people who are depositing money or investing money with the banks. They are urban Mal, they are the capital provider. So between the contract is between two parties, one party is providing the capital of the partnership, and the other one is working on it and making money and they agree to share the profit. And that's it, there is no salary, no fees paid to anyone. But they agree to share the profit owner ratio specific ratio 40% for one party 60% for the other party or 8020 5050. It depends it is based
it's up to them, based on their agreement in the books of the capital provided is called a boon man.
And the other one is called the lion or amadora. In English, we might call him the intrapreneur.
And he's the one who takes care of the management. He's the one who manages the business.
And there are some conditions we need to talk about them in sha Allah. But before we talk about the conditions of this moratalla
work, what makes it valid and what makes it invalid.
Let's talk about some proofs. So Rosaura lies and allow it to sit in and before Islam. When he was 25 years old. It took some money from his wife, Khadija and the owner. And he said he took his money, this money to the area of a chef based on this contract. So he was not employed. He was not hired by hadiza. He was actually a partner. The act between them was mudaraba.
And he went to the area of a sham with our servant Massara.
He bought Of course, he took some commodities with him from Makkah, he sold them in the area of a sham, Syria, greater Syria that time. And then he bought some commodities or some merchandise from the area of Syria that time, came back to America, he sold them he made profit. And he shared his profit with Khadija before he got married with Khadija for the alarm. But someone might say this Hadith, or this story should not be approved in Syria. Because this is something happened. Something happened before Islam. Before so Lhasa Salaam became Prophet, but their own Emma said it is approved because it was so nice and allow it was 11 narrated the story later on.
After after he became a prophet. And he approved it. He didn't say anything. He didn't make any objection against it because if it was Haram, he would have said that he would have said that, you know, this is something happened at the time of before I got married with the Allahu Allah. And I was not supposed to do it this way or it is not accepted in Islam. So Rasulullah sallallahu wasallam approved this practice or this contract. One of the proofs is the story of Abdullah and and obey the law. They are two sons of Omar Hassan and it is a beautiful story.
It is a story of the honesty of armor of nahata the greatness of this man
talking about nowadays
He was a great personality or whatever bla bla bla and so his two sons Abdullah and obey the law went with an army to the area of Iraq.
And when the they finished with their jihad or they completed their mission with the army, they were coming back to the city of Medina.
So the past why
el Basra, the city of Basra and the governor of city of Basra at that time was Abu Musab al ashari. Are they alone? So they went to visit Abu Musab al ashari.
Abu Salah lashari, he was, you know, the host and he received them.
He was very happy to receive them in his house because they are the children of ameerul momineen are going to hop up and out of the lab neuroma is a great hobby and so they're great people they used to love each other and everything.
A Moosa said, I wish I can do a favor for you can help you with anything. And then he remembered he said they have some money with me. That belongs to the Treasury to the Muslim beta male to Muslims. I will give it to you as a loan, I'm supposed to send it to Roman hapa in El Medina.
I'll give it to you as a loan, buy some stuff with it in a massage and take it with you to Almudena you sell it make your profit, take your profit and give Russell mal the capital to armor or the allowance to me, meaning the prince of the believers. So they took this money they said yes, we'll take this money that you hit. And we bought some merchandise with it from city of Basra they took it with them to Medina
and then we sold it in Medina and we made a profit so they took their profit and they gave the money the original amount to our laptop. So remember the Allahu anhu on acquittal Lj she a sliver who myth lemme as left Akuma
did he do this favor to all members of the army?
Did he give this loan to all members of the army? He said no. He said even I mean for as left Akuma the children of the prince of the believers. So he gave you a loan. So it's a favor that was given to the children of the prince of the believers called a dl malware repair. So give me the original amount and the profit doesn't belong to you.
sob the love and aroma the allow and who second? He kept silent but obey the law. Alma ambarella Yeah, man, but he like he had a mini Yeah, this is not right. This is not fair of principle, the believers, because if this money was lost, we will. We are responsible, we would be responsible for it, we have to pay it back to you. And this is actually the basic ruling. Of course, if you take a call from a loan, a loan from someone you are responsible for it is not a man in your hand. No, you are liable to pay the person back. So he said we took it as a loan, and we were responsible for it. So we deserve this profit. Because if it was lost, something happens to it to it, we have to pay it
back. That paid back. So ramen hottub didn't like this explanation. He said a dl mallari. He said give me the money and the profit. So one of the Shula said, Omar, one of the people who used to sit down with Omar, I assume he's a shorter member.
He said, Yeah, I mean a minute lohja Alto.
And this is the proof that zalto carova.
For Camila Omar accepted, he said, Oh, I mean, meaning what if you made it, you makes it you make it a mudaraba or a parent.
So I'm going to have accepted this solution. So they gave him the original amount and half of the profit 50% of the profit and then obey the law. And Abdullah Omar took the other half of the Prophet and the problem was solved, but it is delille it is a proof that this kind of Mohammed contract is valid. And this is found in more problematic
and it's hard is hard it is and also it was a practice of arithmetic when I found what they allow I know it is mentioned in what Malik two he used to give people his money via this contract and they would you know invest his money and they share the profit with Earth madam, a fan of the alarm I know. And we know that the last parent Allah has blessed investment or the business of Tata. These are some differences between musharaka and mudaraba. So
moussaka in normal moussaka, there are sometimes sometimes you know, Mr. sharika. Some partners come with something different with their knowledge or expertise or some very normal moussaka investment comes from all partners, everyone contribute with his money to the partnership in mudaraba investment is the sole responsibility of a boon man or the capital provider. In Lusaka, all partners can participate. There is no problem with this issue here with this point here. All of them can participate in the management of the business, based on the opinion of Jim who own the capital provider in mudaraba, or Cara does not have the right to participate in the management of the
business. But this is based on the opinion of Jim Hoare. But
in the hanbali madhhab school of thought, he has the right if he makes a condition, if he wants to participate in the management of the business, he can he can participate in the management of the business, he can give his opinion, maybe the final decision will be with the metadata with alarm, the intrapreneur. But based in the hanbali, madhhab. They said there is nothing against it in Sharia. And we have the principle in Sharia that all stipulations or contracts are halal unless proven otherwise. All of them if anyone comes up now with the contract with a new contract that people did not know before, did not use it before. And we look at the contract or odema looked at
the look at the contract. They don't find any
any horror, any uncertainty and the risk, unnecessary risk. They don't find the rebar in this contract or any injustice, then basically By default this contract should be held. This is the the method will Hambali in MLS in business transaction is based on this principle. So unless there is a proof from Sharia that says this is haram, then the correct old or the invalidate all the stipulations in the conditions.
And I feel inclined towards their opinion regarding dismissal.
In Lusaka, all partners share the loss to the extent of the ratio of their investment. So if someone method and has invested 20% of the capital in Lusaka, if there is a loss, he bears only 20% of the loss. He contributed 40% his loss will be to this extent 40% in mudaraba, the losses suffered by the capital provider
but the entrepreneur loses what what does he lose his effort his time? Yeah. But he because he didn't provide any money he didn't contribute with any money, so he doesn't lose from the capital if there is loss.
These are some differences between mudaraba and regular Masaryk,
a moussaka, the partners mixed up their you know their capital in joint pool. So, all the assets are jointly owned by all of them. And each one can benefit from the appreciation in the value of the assets, even if the profit has not accrued through sales. What does it mean? For example, if they had a feedlot for example, they decided to buy cattle.
And then
cows have given birth to you know, we got some
we got some increase here in the number of the the cattle, because some, you know, cows have given birth to offspring some offspring. So the there is an increase in the capital, but it didn't happen through sale. So in moussaka, all the partners share in this increase, this is a profit
a mudaraba. It's a different story, because the capital belongs to horrible man. So they said all the goods purchased by the mme are solely owned by the capital provider, this is the opinion of majority of scholars in general.
So, these are the and this is a good example and if she give birth to lamps, they said they belong to a building man, the one who owns the capital. So he has no right to claim any profit, you know, in this increase the intrapreneur but some other scholars disagreed. They said any increase beyond the capital. So it is a profit and madora Hon man should share this profit. Hello Adam here.
It is right opinion but this is what I wrote here is the opinion of shoehorn earlier. The majority of the scholars are allowed to add Adam but it could be
If you are doing business with someone and these points are you know are there and it could be a dispute or a point of dispute between you and him, I would advise that you write a contract.
And even if you go with the opinion of mumbo jumbo, either you go with the opinion of jumbo or you go with the other opinion, there is no clear evidence about it there is no halal and haram here.
But it should be written down. So there will be no dispute in the future. Because if it is written down, what will happen if there is a dispute, sometimes you get the madora, horrible man going to an Imam or a scholar asking him and getting a fatwa, the entrepreneur will go to another email or another scholar, or he will double check by himself go to islam.qa. And he will come up with a fatwa. And then he cannot solve the problem. Someone is selling a saying, you know here that, look, it's the majority of scholars are saying that this increase does not belong to you. And the other one might tell him Oh, I asked another scholar, and it is the opinion of a group of scholars and
it's Hello, I have a share in this increase here. And it will be it will be difficult to solve this problem. But if everything is making is made it clear from day one, and it is written down, if there is a possibility that the capital would increase in this way, you expect it to increase in this way. And you should write a contract and everything will be fine because when you once you write the contract, then both of you are bound by these stipulations.
And Muslim owner and the surety routine, Muslims are bound by their stipulations, and will this will solve the problems. And there are some other issues that are sometimes you know, based on their own of customary practices, we'll talk about it
today insha Allah, and they need to be sometimes clarified. When you make an agreement with your partner.
Businesses mudaraba we have two types of mudaraba restricted and unrestricted mudaraba fixes the mudaraba the madora should invest is the money in a particular business, the honorable man will tell him, I want you to invest this money in this business, buy cars buy and sell cars, for example, or in construction. Or we should, you know, bring furniture from China and do business together, whatever. So he will give him
a restricted area of no commercial activities don't do so I didn't ask you to buy cars, buy and sell cars, I asked you to do business use this money buying and selling furniture for example. This is a restricted mudaraba. And based on many around me, it is okay. And it is fine.
But the sad someone wrote me and he said if he tells him you don't buy from that store, you don't buy from that store, you don't buy from that city you don't buy from that person, you are only allowed to make business in this you know, buy only these commodities. Some road Emma did not accept this, this stipulation. So these conditions like Lima Malik, for example. But it is all based on the agreement. There is no clear evidence here. Again, if you are making a contract with someone doing business with someone, write down these conditions. What do you want him to do? You're giving him your money. You want him to buy sell cars or what? Clothes furniture Do what? So you have to agree
on your business and restricts that when you come to someone give him your money Mashallah, you're a great businessman. I have a good reputation in the community with making money here. 100,000 do business with it, I'll share the profit with it with you.
And there are people especially women who don't have experience for example.
She talks to approaches, you know, a family member, a go you get this money, do business with it, I will share the profit. I dealt with some cases like this. And sometimes it works. Sometimes it doesn't work it depends on the honesty and people or their expertise or the way they do business and hamdulillah but this is something also accepted interior unrestricted mudaraba.
Now the distribution of the profit. So the Buddha said the capital has to be in the form of cash or commodity with a well determined value. We talked about it before we said that Mr. Maliki moussaka, he said it's okay to bring a commodity you agree on the price of this commodity and that will be the capital
Not the commodity, the price of the commodity, and then he will sell it, people will sell it and will use the money the price of this commodity to start their business. In American modaraba, he did not he did not agreed. He said it has to be cash. But Mr. Mohammed, Mohammed, some other scholars, they said no, it could be a commodity, if the value is well determined at the time of signing the contract. And it makes sense.
If you agree on the value of that commodity, called the value of this commodity is 10,000. So starting your business with 10,000 makes sense. When you buy and sell and you finish your business after one year, and you want to count your profit. You don't try to look at these commodities because maybe the cause is solved does not exist. So you don't deal with it actually, you deal with the price with 10,000 that was your capital. And then what is if you made 15,000 or 20,000. So if you made 20,000, your profit is 10,000. You deal with 30,000 distributed as profit
by
each one has to know his proportion of the profit from day one.
Everyone has to know 20% 30% 40%.
Otherwise, the contract is not valid. From day one, the time you sign the contract, you have to agree on your ratios. No particular issue has been prescribed by the Sharia, it was left to their mutual consent. As we said in the moussaka, the allocation of a lump sum, amount of money of profit to any party will make it invalid. If you tell them like listen, this is a mudaraba I'll guarantee you that you get like 2000 every month, and whatever left after that is we can share it as a profit. You take 2000 this is not accepted in Milan. And Milan is not accepted in Milan, but you cannot give him a salary. But in a sherita. In partnership, what did we say? It's okay, you can hire him, as a
manager, give him a salary with a separate contract with a different contract. Like you hire someone else. The mudaraba he's actually he's not coming with his money. He's coming with his skills with his expertise as a manager. So the profit that he will make that will be his decompensation that will be his payment, the profit that he will make.
Are we allowed to determine different proportions for different situations? This is a question one brother, one of the brothers asked last time Yes, it is Hello.
So you can say my friend and if you do business in town, you will get 30% if you travel with this business, you go to a different town you go to interior, your profit will be 50%. That is accepted and there is nothing wrong with it.
Brother said is what is the common practice nowadays in companies. If the profit is
small, then they give them a bigger amount bigger share of the profit. But if this it's a big company, and they are making, you know, hundreds of 1000s or millions, then the might the decrease the amount of profit and the rest of money is usually invested back in the company. So it depends on the bracket of the profit and it is hilarious, okay, it's fine. There is nothing wrong with that. Five mudaraba account and daily expenses. This is something that is also very common in the Canadian market.
Here, people sometimes they do business with each other and one of them will travel. How about his food and his accommodation and his fuel and everything. So the road ama had some opinions about it. Remember how it allowed him to claim the daily food expenses only. Either he's whether he's traveling or he's in town. But the rest of the scholars they said he doesn't have the right to claim these expenses unless he's traveling.
If he is traveling, then he has the right to claim and this is the right opinion is if you are in town, you are in town I mean you you have to take your lunch and
take it at home dinner. I mean, there is no there is no reason for you to claim your food from the mother of an account if you are in your city in town. But if you are traveling it makes sense and this is a common practice as I said in the Canadian market Nowadays, people travel usually they are working with not with big companies but small partnerships.
Usually people come in claim their food expenses and their accommodation or fuel and so on.
But these are
They cannot claim any periodical salary or fees for his work for the work that was done by him. Because that is that is his partnership that is his contribution to the company.
Now, termination of the mudaraba is is a is a problematic and it's a problem in the books of termination of mushara cat partnerships on mudaraba. The fukuhara give unlimited power to the parties to terminate
these kinds of partnership and their romantic contemporary scholars, many of them have struggled with this issue. Because he said in many times, in modern context, it doesn't make sense at all, it is not helpful to give this a limited power to partners to terminate the account of the partnership at any time,
especially when the partnership is about a long term program, long term project. And the majority are the intrapreneur has made some effort spent some time on it. It's just the journey started three months ago and expecting to make profit within a year or two. And then rubble man would come after four months or five months I said I need my capital.
So, the fuqaha in the classical sources of Philip have given him this power, they said the only thing he has to give him a notice, but he has the power he has the power to terminate the contract. So, the aroma here they said again, the contemporary scholars who have studied this issue,
he said actually it was at the time of Rasulullah Salaam in the old days, it was very simple two people coming together very simple, we give him your money goes to the area of shamari Amanullah or to our other country, he will buy some commodities come back sell them and then
the problem is solved. But nowadays business is very complicated people when they start projects that are very complex, they require different a lot of effort and work and everything. So it's not fair for for each party is actually to terminated in the middle of the way before you know
you know completing the project. Of course, there are lemma in the classical source of fifth they said if the capital or the you know, the money still in, in a in a form of commodity, he has to give him time to sell it, to liquidate, liquidate the everything. And then we can do a more hassle, but he can count their profit. So, yeah, it makes sense. But the problem is with giving them this power to terminate,
you know, the contracts is anytime, even by giving a notice. You know what I mean? Or like Mr. Malik, and some other scholars, they said, No one has the right to stipulate a timing and a period of time to time the contract. But the man Hamburg in the hanbali school of thought, they said no, they have the right there is nothing wrong with it. If they said okay, this company, this partnership will take a place for two years or three years. So we're not allowed to terminate it within before two years has passed have passed. So now it comes to the contract. If you are doing a project with someone and you feel that if the project is terminated, the partnership is terminated
within three months, you will be hurt or you will lose some money then it's better for you to sign a contract and stipulate a condition put a condition but timing for it. We're not allowed to you know to liquidate or to terminate this partnership before one year for example, or two years you see what is good for you or what is good for the other partner. So it has to be based on agreement. So if everything is based on agreement, then we have to you know abide by these conditions and everything will be fine at the end inshallah.
Pipe
before we
allow you to ask your questions. I would like to mention something about
that something that everyone needs it nowadays it's about buying extended warranty. was asked about it by many brothers. Just tell you that buying extended warranty
in Islam to buy a warranty by itself make it
in a subject of the contract is not Hello, its Hara. But if it is part of the contract, for example, you go to the brick and you buy some furniture.
Buy 3000 value furniture or 4000
They offer you extended warranty for five years, you pay extra $100 or $80 sometimes, and you get this extra warranty for five years and it is included in the contract. There is no third party who is providing this warranty. It is the same company who is providing this warranty. And this is helpful. Because the main subject of the contract is not the warranty itself is actually the appliances or the furniture you are buying.
But if you if the break holes you You didn't buy the extended warranty from day one. And the company calls you after three months or four months. Hey Mohamed, can we offer you a deal today? We want to sell you an extended warranty for like $80 we'll $100 It's a separate separate contract. Now. It's a separate contract and there is no you cannot buy extended warranty. What do you get? Because what is the counter value here? What do you pay $100?
What is the counter value?
In this separate contract?
Now
nothing something could happen. Or it might not happen, right?
It's insurance. It's kind of an insurance. So it is haram because there is excessive horror here. You might need it.
Or maybe you don't need it right. So you're not certain here. This is one app for Roku deliverer. certainty we'll talk about it in the future we didn't talk about in this series insha Allah maybe after Ramadan, we'll do a different second part of this program. We'll talk about it. So if you buy it with the ticket, we're buying a ticket plane airplane ticket or buy furniture or buying a car, you buy it on the same day in the same contract. It is Halloween
in the car the filter Kiyotaka roofie, toby melee autofill awesome. Any in Sharia law, a small amount of horror is totally rated
with a big amount of horror is not tolerated. When the whole contract is about something that is uncertain. Then it is this is Hara.
We said in the beginning of these, this program, we said the basic prohibitions in our Riba, the horror which is uncertainty or risk, it depends on the translation, but not every risk is haram. In Islam, not every type of risk is some some types of risk are normal, they are natural, they are part of doing business, but there are some types of risk that are not necessary and they are not accepted in Sharia. And you are not allowed to you know, buy and sell these types of risk or make a transaction transaction a business transaction upon these types of risk.
So
now, and third one injustice. Well, we mentioned different types. There are different types of
forbidden transactions because of other issues. But one of them is injustice. One of the main issues in business in business transactions in Islam is injustice done. Or I could learn more in Nashville Barton, and this might take different forms in Syria. Now, we have 20 minutes and this is the last halaqa in this series. Next Friday we have a guest speaker Sharif Abdul Rahman Murat is coming from mercy mission is coming from Vancouver and he will have a halaqa here after that Jeff Naveed will do
a halaqa and after that we might get another guest speaker
and then shifting the views will continue with his halaqaat before Ramadan, we might do a workshop about Ramadan. shala after Ramadan, we might start again, doing some you know some halaqaat about Islamic finance. But in this series, this is the last halaqa Tonight we have 20 minutes we can talk inshallah as it for the
so called Islam exam, you go into a contract of Nevada. They don't specify a specific amount of profit that you get every year. But you realize that there is a pattern so every year you're getting this 13% it's not written in the contract, but there's always the same profit that you get every year. So does that put it in any notes in it or is it perfectly okay?
I don't know about the contract. But this is islamically it has to be this way. They have to tell you your profit should be 30% or 20%. Will they have to tell you
Not say 30% of the profit they get 30% of the money you put.
This is not Helen, this is not Hara, but I'm saying the their agreement or their transaction is not heard, because I don't know about the contract. So you're not giving me enough information to tell you about it. But to tell you, if you give me your money,
and I tell you, I'll give you 10% of your 10% of your profit of your money. This is not helpful.
Whether we're doing moussaka or mudaraba too tight to tie up a rate of profit to your investment is not valid.
This is not accepted. And in in Islam in some Islamic banks, they give you a number, but they said this is not guaranteed It is based on previous experience.
It says could be between 4% to 8%.
But there are many mudaraba if it is mudaraba I'm not sure if the contract we are talking about is really matar about could be worker level Istithmar there are different types of in a contract. If it is mudaraba then you have to they have to specify from day one he tell you that it's difficult in Islamic banks, because there are different big number of investors you know, so it could be the best maybe the contract in in in Islamic banks were cannibalistic smart, they act as an agent on behalf of you they invest your money and they take a fee
from your investment and they cannot guarantee how much you make profit because there are a Joaquim they are an agent they are acting on your behalf investing this money on your behalf. This is not mudaraba
so I don't know about your their contract. But in Sharia in mudaraba you cannot tell the person that they will give you 10% or 20% of your you know capital cannot do that 20% of the profit
goes to uncertainty
is there a level of
is there somewhere where the risk is extremely high that the uncertainty gets waived luck in terms of you're working at a very extremely hazardous area that you have to do work there and then
offer you like some insurance or something like that is very high. Okay. Um The here there are different types of risk.
The horror that we talk about in Sharia is not tied up to the natural disasters or commercial risk commercial reality like methane you go into the market you buy some commodities hoping to make money and then you find out that there are other people who bought the same merchandise and the price went down and you lost money this is a risk that you took the moment you bought this merchandise from another country brought this country you took a risk this risk is hell and it's okay it's not haram because that's a national of making business. Okay, but he lost some money not because you made a mistake in Korea
because this is the market nowadays the market is slows down so he lost some money or you did some business and he got some bizarre some merchandise from another country in the way you know the truck la casa de la made an accident for example, and you lost all your merchandise. This is a rescue that you took transporting your merchandise from another city to the city. It's a risk but this risk is halaal is okay is accepted in Sharia. But the risk is one you do what it is based on contractual agreement. You are making a contract with a lot of uncertainty. You are not sure if you will get what you paid for or not like method gambling. Gambling is a pure horror. This is an example of pure
horror. Pure horror isn't gambling. You pay $100 you buy a lottery ticket and then you know don't know if you're gonna win or not. This is pure horror. Bizarre or have different has different levels. Okay, so excessive order is not accepted in Sharia and it invalidates all the contracts. Middle in the middle. I mean, it depends. It's a you know, all the contracts that have a medium I would say a medium amount of water a controversial some rhodium accepted them some rhodium I did not accept them. And if it is a small amount of water, it is usually totally rated and accepted in Sharia. But of course these rules will not be clear, until we talk about examples. We mentioned
examples. So here the
The risk that you are talking about someone works in a construction site, right. And there is a risk that he will, you know, he will, I don't know something might happen to him, something might happen to him. So this is not a horror. This is a construction business. It's halal business. But you tell me now, I mean, accidents are very common in this site, and they want to buy insurance are here, that's a different story, what kind of insurance you want to buy health insurance, it could be helpful in this case.
But then in America, in United States of America, they don't have, you know, the health insurance is not subsidized by the government. And people have to buy health insurance. Otherwise, if they go to the hospital, they don't have this protection, then they will end up paying big amounts of money, and they cannot handle it. So the family said, It's Halloween in this case to buy this kind of insurance. Or if you cannot,
if you if you are forced to buy it, every citizen have to every resident of that country has to buy this kind of health insurance, it becomes a law, then you cannot, you know, go against the law, you have to buy then it becomes Helen, a Lost Planet. Allah will not take you to account because you bought this insurance. But you buy insurance for everything, then you have to be careful about it. You know, to me, you have to be careful about it and insurance when we talk about insurance. I'll tell you some history. Before the time before us who last SLM became a prophet at the time of Jamia, they had an Islamic system called de la Killa.
And aerosolize SLM has approved this system. This new law malarkey law, I don't know if it was very common or used in other societies and communities. But it was very common in the Arab community in the Arabian Peninsula. When someone killed someone else, by accident, he has to pay Diem. And sometimes it is a big amount of money, he cannot afford it. Okay, if he's poor, he doesn't have the means to pay like 100 camels. At that time, the best type of their wealth of the time was camels. So if he is supposed to pay like 100 cameras, they cannot afford it. So they had me varmint Lackey. Now what is an ocular, all male members of his family member from his father's side with come together.
And it is like a worship like an obligation upon every male family member from his the side of his father, which come together, and everyone will contribute with something, it's a type of insurance. So they are protecting his right now. So they're sorry, they are paying his now the DIA on his behalf, the amount of money, the blood money that he has to pay for this person, or the family, with the person that he has killed. So there are who are flexible with insurance. This is their reasoning that they said we don't have an appeal. And nowadays, we didn't have any time lakita if you kill someone who who cares, who will care about you, even your family members that are going to do
anything, there is not exist. This system maybe does exist in Somalia or some other countries where they have this tribal you know, tribal sense of, you know, the sense of belonging to a tribe is very strong there in those communities, maybe in Afghanistan, or those countries allow Allah but nowadays in most of the countries we don't have this.
Maybe your cousin will not most likely your cousin, maybe your brother's your father cannot do anything about it. So they said this museum is not there and people are left without any protection. I'm not saying this that because of this, we don't have an ark and then insurance should we should be held. No we have to be since we know that it has a lot of horror. We have to be careful if you have an an old used car. Instead of buying full coverage by only one way just to be in the safe side. Because if you
have an accident, you will be losing an old car used car that was worth 2000 or 3000. So now as I said, if you have a new car, this is not my federal, the Federal of some of them and they are responsible for it. If you have a new car
and you want to buy a full coverage, you can buy it because it's a it's a big amount of money. And if you but I would prefer it's a personal choice here. I would I would I would prefer that you have to work on on the last panel to add in these cases. You leave some room for telecoil you know what I mean? It's nice to protect yourself.
But do of course of our current master after working on the last pantalla strengthen your relationship with Allah subhanaw taala. And our last prayer to Allah will protect you. This problem also ended the many brothers who own houses in this country would face this problem are facing this problem they need insurance sometimes. It's not because the they are worried about their own houses. The problem is, if a fire if your house is burnt out, and then the neighbors will get some smoke through the windows, they might sue you for that.
It's very dangerous here and people are waiting for actually these things to happen to take advantage of them and make a claim.
And also so it is very dangerous.
So but at the end here when it comes to this issues, I don't want to make a fatwa it's a personal choice. It's a personal choice. But if you have an old car as I said, one way will be enough. One way will be enough after working on the last panel with Allah. It's always good to be in the safe side with your dean.
But her here is not like Shea river there is zero tolerance to Riba in Sharia. So as I said, a small amount of horror is tolerated in Sharia. So the significance of you know, for her is not the significance of horror is not like you know Riba in our Sharia in our Deen
will love to Allah Allah. Yes, we still have seven minutes.
Okay, yeah, this is a good point. The brother is saying here and he cannot make salary in mudaraba. So what about if he has a family and he needs a salary.
If he takes a monthly salary, he wouldn't be treated as a salary. It shouldn't be treated as a salary. It has to be a subject will be subject to the final settlement. Like if he took 2000 if he allowed him
that Obama allowed him to take
a 2000. And for example, every month, he's not allowed to claim a salary for himself. But if he allowed him to take this amount of money from the mudaraba account, based on what Ahmed said, for example, food expenses,
were low to Allah alum, if he takes this amount of money, it will be subject to final settlement. For example, if after,
after one year, they count their money, and they found out that he made 50,000, how much he took, it took 20,000 then it will be
extracted from his profit from his share of the profit. But he's not allowed to take a salary, because he's coming to the partnership with his management. So he cannot be paid for his management. And also given profit for his management. moussaka is different.
Yeah,
if it is an ongoing, if it is an ongoing business, you have to you have to have a certain point where you, you liquidate the business. And you should you will calculate your profit. You have to have a way we because the app is on the profit.
It is a major part of the contract, it is broken of the contract. So without calculating the profit. I'm not saying every year every year is an example. You might go in to do business for five years or 10 years. And you calculate your profit after seven years. It's up to you. As I said, you know it is based on your conditions, the conditions that you put in the contract from day one. If you say we're not going to calculate anything, until past 10 years have passed, it's up to
you. So one year is just an example. I'm not saying that modaraba has to be done for one year.
It could be final terminated after six months could be after 10 years. It's up to you.
That's why when we do business with our brothers or with non Muslims to we have to be clear about all our conditions.
The final settlement
he has to pay it back.
It's like a loan.
Yeah, it's like a loan. That's why I didn't see
You know, the rule ama did not is not a lie most of them. They said he shouldn't take most of them. You shouldn't take, you know this amount of money from from from the partnership. But we disagreed about the expenses that he should claim. Most of them they said he can claim expenses when he is traveling. When he's traveling, he exclaimed, even even some, some scholars, they said, even if you buy a buy some clothes, he can, if he's traveling
a lot, but it's based on the agreement, when it is a partnership between two people, but when it is done with a big company will so usually it is not done this way. But without ABA could be done between individuals and Islamic banks, for example. And
in non Islamic bank, conventional banks, usually they don't know this kind of contract, but they will invest there are different types of investment, they will invest your money for fees.
Usually they take fees and they invest invest your money as as a broker like a broker, usually they have brokerage houses and they are like a rookie, like an agent. So the act between these banks nowadays, it's like Apatow for Calla Willow tala
royalties.
Manufacturers and you want to set up a shop where I buy equipment and you're buying it from me
Can we have an agreement where
you can buy the equipment up to like a 12 month installment, but in that 12 month, I put a condition that every like, if it's a doctor's office every
month I need like 5% of your income is permissible.
you rent for him the equipment
okay.
And I just tell him that
you can take longer to pay back.
So you sold these equipments to him and then he wants to claim 5% from his profit.
You don't have the right to do that because that's his property.
When the sale is finalized, is concluded. So he owns this equipment, he owns them what you own you own your money. You choose you have chosen to sold him to sell him this this equipment on based on installment. Okay. This is what you own. you own this price. This amount of money that you agreed upon. So now he owns this equipment. He's the owner, the sole owner. You have no right to share. You know in his profit here.
There is no moussaka between you there is no mudaraba
and it's a sale
based on no down on a deferred payment basis. That's it.
So you have no right to claim this royalties on these equipments.
Had I mean unworthiness will bottle there is no
there is no excuse for it. No reason for it no basis.
I don't know if it is rebar. I don't see any point here to making the rebar but there is no justification.
Not everything Haram in Sharia is river there is no justification for it. Because in Sharia, he is the owner now. Yum lick milky uttama macerata malkia the conditions of ownership in Sharia is that he has every right to you know to use his equipment to do with it whatever he wants. He has total freedom to use it in which way in he wants. So he bought it from you. You have now you have nothing to do with this equipment. The only thing you asked for is your payment.
You know what I mean? So if you you sell you tell me the payment my payment is composed of these payment and the 5% that you will make from his profit.
Then the problem is there is Shahada uncertainty about the price.
The price is not clear here.
Because if your payment is like $20,000 and 5% of what he makes every, every month, for example, these 5% could be 1000 in a month, and the other month could be 3000 or 4000. The other month could be $100.
So now if you tell me this is my price for the equipment we tell, you know, the price has to be determined in Sharia.
The price has to be determined in Sharia Otherwise, this is a hurdle. So you could say is haram, but is not Riba. But if you if you sold it with the market price, you're happy with the price. Anyone I take advantage of this person and take this extra 5%? This is not
you know, this is enough.
Yeah.
Life insurance?
Well, the way it is done in the West is haram.
Yeah, some of them are talking about life insurance with the capital companies, the capital, and Muslim companies doing insurance. I don't know what kind of life insurance. What I know is they do it based on investment. They call it life insurance, but it is investment. These companies invest money actually, insurance is not only about insurance, so they're doing a lot of investment.
And most of the takaful companies that are providing Islamic insurance, when it comes to life insurance, we do it. It's an investment pure investment is different than life insurance that is provided here in the West. But the remedy said life insurance isn't the worst years harami have no. So we need insurance in our with our cars, because there is a need. If you don't have a car, you'll have a miserable life in this in this society. And the Sherry hamdulillah Annie, our Dean is flexible and flexible. We have the Riyadh necessities we haven't had yet. And we have luxuries Kamali yet. So if we miss one of the necessities, you might die, or you might have like a very hard
time like math and having a shelter is a necessity. With a shelter, you can rent a house, we can own a house, owning a house, being an owner of the house is a need is not a necessity. But having a shelter is a necessity. Because if you don't have a shelter, you will stay in the street with your family. So if there is a necessity, you don't have any way the old ways of getting a shelter are closed in your in front of you. The only way is to get a loan through methanol Riba then he or Reba becomes halon have the right to be held moderate, for example.
But here in this country, we I mean, it's easy to rent a house right. So there is no borrower, there is no necessity, but it is a need, and need this need there are different levels of needs, there is excessive need higher level of need, and there is a normal regular need. If you have maybe a children or nine children, it could be this need might go to a higher level, it becomes a close to a necessity, we have a necessity here. And these need might be of higher level. Why? Because it will be difficult for you to rent a house with eight children and nine children, for example.
So here you need, you might talk to some scholars and explain your situation. And then you might get a federal allowance. And I want to make a general federal. But I believe that buying houses through conventional mortgages is harder.
It's better to be in the safe side here. One, we have enough. We don't want to meet the last panel that I had on the Day of Judgment with the burden of Riba. And there are other alternatives as I said, but not very, very pleasant, they are not very attractive.
We need to make the other the last pinata Allah will help us as a community to to help ourselves we need to help ourselves to do something in the future and provide some alternatives for our communities. We do it together. Yeah, and insha Allah gave me later, but it needs time. It's not easy. It's not easy. And also only the Muslims who are providing this kind of services are actually sometimes under the pressure of commercial reality the they sometimes give up, they compromise on certain principles, because they cannot compete with the other companies and sometimes are under the pressure of regulators, regulators in a non Muslim environment. So there are many issues that are
involved in this, you know, in this business, but the kydex
The basic clarity when it comes to your individual life and choices, the choices that you make. Try to be as a Muslim to be in the safe side as much as you can. Try to be in the safe side. You can be in the safe side and live a normal life in this country.
You don't make money. But at the end if Allah Allah wants to make you rich, if he wants to make you rich give you more money through Hillel ways he's able to do that right. But here becomes You know, he comes in a matter of taqwa. What is your level of taqwa? What is it? What are your priorities in life? So it's good to know about business and do business and be aggressive about business make money and it's not haram to make money. But try to any to any always try to watch the sources of your if your income, because you will be asked about it. This is one of the four questions on the Day of Judgment. Everyone will be asked about these questions and one of them is about his wealth,
his money. How did he
earn it? And how did he spend it in which way he spent his his money? So you'll be asked this question and everyone will be Rasulullah sallallahu is Atlanta Zoo Kadima added in a servant will not be allowed to move from his position until he is asked about these four questions. And one of them is your wealth, your money, how did you make your money? How did you earn it? Okay, and we know Mashallah Sahaba, great Sahaba, who were wealthy, extremely healthy, and unless fertilize put Baraka in the wealth, like Earth, man, we only know that there are some other servers, like I'll give you an example. I will finish with this complete the halaqa with this. There is a Sahabi whom Rasulullah
sallallahu Sallam told him, gave him a dinner, one dinner
and told him to go to the market and buy a sheep with it. For us in Lhasa sell on behalf he's working now he's making him a worker on his behalf. So he wants to the market.
And he negotiated with this dinar, golden dinar, he bought two sheep instead of one sheep.
So when he was coming back, going back to our sort of lifestyle allowance, lm he met someone he gave him one dinar for one sheep.
So he came back to us or he sold on cheap to him. Baron Fuli. Remember we talked about Merrill Fuli? The one who does not own but he's working here, maybe you can say he's a worker, he's an agent, a solo singer, maybe give him the freedom to just few seconds. So he he sold one sheep. And he got one dinar, one golden dinar in his hand and one sheep. So it also lost him gave him gave him one dinar to buy one sheep. Now he's coming back to us alone with one sheep and one dinar in his head. So Rasulullah sallam, he said, How did you do it? He explained to him what happened.
And that moment wrestlers as lm a director said Allahumma barik la houfy Safa party a, what a great da who Allah bless his business transactions in what did he say this a hobby. He said, I used to go to the market in the morning marketplace and make some business activities I would come would make 40,000 as a profit in the morning before going back to my friend
Baraka of the day out for a solo license.
So if Allah subhanaw taala wants to give you a risk, he will give you a risk. And there is Baraka in Dijon and it's good if you have a job full time a job and you think about investing your money in a halal way. Think about it. It's good there is Baraka in business. I got two brothers just few days ago and he said that we're a woman has an amount of money that doesn't belong to her she it belongs to a group of children, the ARIA Tamar orphans. And you know what, Omar mahatama de la vida, and he asked about zakat. Should she pay zakat? No, yes, she should pay zakat on their behalf. But on top and all the Sahaba they used to say it tells you roofie I'm worried that our Guru has sadhaka said
invest the money of the attorney because if you don't invest it what will happen to will keep decreasing every year. Every year you have to pay 2.5% even though they are children, they are not mature enough. This is the only thing that is required from a child who is not McAuliffe or Majnoon, if he is wealthy, he has to pays a cat because the cat is the hub of the fakir the right of the fakir on the money not on you. So if he was a child, five years old, and he has 10,000 20,000 he has to pay zakat every year. So every year imagine paying to 2.5% until he's 18. And he wants to go to university 20,000 might become 5000 or 6000. Right? And with inflation, maybe it's nothing of that
time
When he's 18 years old, so the Sahaba of the allow and unlike the rest of the Sahaba they used to advise people who are guardians of the orphans and they have money in their hand on behalf of their these children they used to tell them invest this money otherwise it will be decreased. Badly decreased by the second Zakat is an obligation we cannot escape it. So Allah Subhana Allah and you will fit under the qualifier is a como la halen Baraka lo que como la bless your efforts. And just a couple of final for coming to the halaqa. Well, as I said, next Friday in sha Allah we get a guest speakers should have their home and Murat there is an announcement about the timing. The time will
be different we cannot do with at seven next Friday, because mercury will be at 740.
The DST will start this Sunday, they were in Canada. So the halaqa will be the next Friday for a couple of weeks will be from eight to nine. from eight to nine Madrid will be around
Asia.
Asia will be around 10 after nine or 15 after nine. So we'll start the halaqaat eight will continue till till Asia chama but after that we will change it will have to do with one hour before mercury because mercury in June will be 10 o'clock. They are laughing