Trading with an interest-bearing loan and earning profit

Question

Question: Khalid, who by the grace of the Most High is a religious scholar (‘alim), lives, in connection with serving the religion (teaching), in a city where the Muslim majority are engaged in trade, and the majority of them are involved in interest-based dealings. It has even been heard of some that they began their trade with a loan itself; and there are also some who did begin with lawful money, but take interest-bearing loans when their capital runs short; and very few are conducting trade in the correct…

Answer

Money obtained by way of interest may not be used by anyone — neither Khalid nor others; rather, it should be returned to the one from whom that interest was taken, or given to the poor as sadaqa without the intention of reward.

Source: Fatawa Mahmudiyya

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