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Endowment means dedicating something that can give benefit, while retaining ownership of it, in order to gain reward from Allah. This means that the principal is retained, but the yield is given freely.


To borrow means to gain the benefit of something, but it remains intact. Borrowing is lawful and encouraged in Islam because it is implied in Allah’s order: ‘Help one another in furthering righteousness and piety’ (5: 2).

Conditions of Hire

Ijaarah means a contract to obtain a known benefit in an ongoing arrangement for a specific period from a known or described object, or a contract to get some specific work for a specified remuneration.


Partnership (Sharikah) means joining two properties together so that they cannot be separated. In Islamic contexts it means ‘having joint rights or actions’.This includes the rights to inheritance, will, or a gift that gives shares of benefit or ownership. This is also called ‘partnership in ownership’.Allah says: ‘Thus do many partners wrong one another, except for those who believe and do righteous deeds’ (38: 24) and ‘If there be more, then they shall share in one-third’ (4: 12).


A loan is money given by one person to another to be returned later in the same amount, so as to benefit the recipient only. It is legitimate, as is clearly stated in numerous Qur’anic verses and Hadith.

Types of Usury

One: Riba al-Fa l (i.e. an increase in quantity). This means that the two items exchanged in a particular deal are of the same type but the quantity of one of them is more than the other. Two: Riba al-Nas’ah (i.e. increase for a delay). This refers to an additional quantity of one of the exchanged items in return for delayed payment, or in return for delayed possession in the sale of two kinds that share the reason applicable to Riba al-Fadhl when one of them is not money.


Definition and Ruling: The Arabic term riba, which means ‘usury’, originally means ‘increase’. In Islamic usage it means ‘an increase in one of the two exchanged items without a compensation to offset this increase. Allah says: ‘Allah has made trade lawful and usury forbidden’ (2: 275).

Commercial Transactions

Essentials: A sale has three essentials: parties, subject of sale, and a formula.Witnesses: To have witnesses to a sale is recommended, but not obligatory.  Allah says: ‘Have witnesses when you make business deals’ (2: 282).