Riba In Secured Loans For Consumables
Now let me ask you a question. A poor farmer who owns his own land need money desperately to sow and take care of his crop. Where and at what terms he will get money? Will his land be considered a business asset and in case of a loss he will have to sell his land and pay the principal back? How would he make fixed monthly loan payments?
5 is not a business loan with an expectation of profit and money is being spent for consumable. It is 100% interest on money. 6. It is not riba, provided that business doesn’t have to pay anything above the profit made and provided the business doesn’t have to pay the principal back from personal property in case there is a business loss. Basically same arrangement as preferred stocks.