Question ID: 30392
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Mufti
. Alhamdulilah Allah has granted me abundant wealth. Often family and friends borrow money from me and more often than not the loan is not paid on the due date. There are some loans that will never be paid. Nevertheless, because of inflation the purchasing power of R10 today may be only R1 in 10 years time-when the loan is to be paid back. Further Zakaat has to be paid by me on the loan amount for every year during this period.
Is it permissible for me to rather make a purchase and sale agreement with the debtor for a loan of say R100000 as follows: I will purchase from Mr. Debtor 10 Kruger Rand @ R10000 rand each which he will supply to me within a specific time period.

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Asked on July 25, 2013 11:14 pm
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Private answer
This is tantamount to interest. You do not pay Zakaat on loans which you know are not going to get back. Pay Zakaat on the loan when you get the money or part thereof back in you possession.
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Answered on July 25, 2013 11:14 pm