Does the Hanafi school permit debtors to profit from loans?
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Unlike a personal loan, which is typically taken and used in need, business loans are often taken with the express intent of profiting therefrom. Often, a business may choose to go in debt not because it is unable to afford a particular undertaking, rather because the cost and/or risks of taking a loan end up being more profitable than those of reallocating existing assets.
Given that a lender doesn't accept interest on the loan, and under the general principle of "Any loan which brings benefit is *riba*", **is it permissible for the debtor to actually (try to) *profit* from his use of this money while the actual owner of the property gets nothing of it?**
I know that it would be possible to work the transaction such that both parties can share the profit and risk thereof (e.g. *musharakah*); that's not what the question is about. I am only concerned about the situation where the capital is explicitly a *loan*.
I am particularly seeking a Hanafi position on this matter, ideally one in which full evidences are presented.
Asked by goldPseudo
(13246 rep)
May 12, 2013, 08:07 PM
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