Comparing Tawarruq and Borrowing When in Need of Money
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The questioner:
He says: Honorable Shaykh, may Allah grant you success, I am in need of money. Which is better for me: tawarruq, despite the scholarly disagreement regarding it, or borrowing and taking on debt? I do find someone willing to lend to me, but the debt is a heavy burden on my soul, and it involves losing my dignity.
The Shaykh:
Meaning, the lender... the lender... Yes, he responds. No, the issue of tawarruq is permissible, if Allah wills, and there is no problem with it. When some people prohibited it, people used to do good by giving loans. But now, people are stingy with their money, and no one wants to give a loan except in rare cases.
So there is no harm in the issue of tawarruq, because it is a sale and purchase. You buy a commodity at a deferred price, then you sell it in the market to someone other than the financier. Its price rises, and you benefit from the current price. When the term comes due, you pay the financier. This is permissible; it is a sale and purchase, and it provides relief for people in financial distress. There is no doubt that this is a Shari'ah solution and a creation of Allah. Yes.
The questioner:
From the Shaykh’s college.
The Shaykh:
It is only permissible if he has the capacity to give people loans. May Allah reward you with good. If someone says that selling on credit is not permissible and that borrowing is not permissible, and he has the capacity and wants to give loans whenever needed, may Allah reward you with good. Good. But if he is stingy with his money and says to people, "Do not do the issue of the pillar, the issue of debt, or the issue of the goal," this is imposing on people and restricting people. It is permissible. It is permissible. If he closes the milk [unclear] on them, they will go. They will go.
He says: Honorable Shaykh, may Allah grant you success, I am in need of money. Which is better for me: tawarruq, despite the scholarly disagreement regarding it, or borrowing and taking on debt? I do find someone willing to lend to me, but the debt is a heavy burden on my soul, and it involves losing my dignity.
The Shaykh:
Meaning, the lender... the lender... Yes, he responds. No, the issue of tawarruq is permissible, if Allah wills, and there is no problem with it. When some people prohibited it, people used to do good by giving loans. But now, people are stingy with their money, and no one wants to give a loan except in rare cases.
So there is no harm in the issue of tawarruq, because it is a sale and purchase. You buy a commodity at a deferred price, then you sell it in the market to someone other than the financier. Its price rises, and you benefit from the current price. When the term comes due, you pay the financier. This is permissible; it is a sale and purchase, and it provides relief for people in financial distress. There is no doubt that this is a Shari'ah solution and a creation of Allah. Yes.
The questioner:
From the Shaykh’s college.
The Shaykh:
It is only permissible if he has the capacity to give people loans. May Allah reward you with good. If someone says that selling on credit is not permissible and that borrowing is not permissible, and he has the capacity and wants to give loans whenever needed, may Allah reward you with good. Good. But if he is stingy with his money and says to people, "Do not do the issue of the pillar, the issue of debt, or the issue of the goal," this is imposing on people and restricting people. It is permissible. It is permissible. If he closes the milk [unclear] on them, they will go. They will go.
Source
قناة «العلامة الدكتور صالح الفوزان»، 28 من 60 / شرح كتاب قرة عيون الموحدين / صالح الفوزان / العقيدة / كبار العلماء — youtube.com (1:09:37)
The Arabic text is a machine transcription of the audio recording.