Questions regarding the ruling on installment sales? (Unclear)
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The questioner : Regarding installments, we have the Muslim Brotherhood operating in Alexandria. They run Islamic companies, about seven contracting firms. They do not say that this is on an installment basis, but rather that everything is on an installment basis. It is on an installment basis so that all the young people can buy on installments. However, they only say "on installments" and do not say, "If the profit is such-and-such." There is no cash payment. If they undertake a second project, do they say it is cash?
The Shaykh : This is a complete ruse. They are selling on installments, not selling for cash and on installments?
The questioner : No, they say, for example, "The Young Egypt Project on Installments." They have a project they call "Young Egypt," and they write in the newspapers and on television that it is on an installment basis.
The Shaykh : I understand this, my brother. Let me ask a question: Do they not sell for cash?
The questioner : Do they sell for cash in other projects, not in the same project?
Another questioner: ...
The Shaykh : In the cash project, do they not sell on installments?
The questioner : No, it is cash immediately.
The Shaykh : Well, why did they do this? This is a complete ruse, but it is superficial. They are twisting the narration about "two sales in one sale." The two forms you described do not constitute "two sales in one sale." They escaped the suspicion, but why did the Lawgiver prohibit the buy-back sale ('inah)? It is a sale, but its objective is to make usury permissible. So it did not benefit them to label the transaction of the buy-back sale as a sale. It did not benefit them, for indeed deeds are by intentions. The buyer intended this, and the seller aided him. In the end, in the final analysis, they intended to make usury permissible. Because this is the one who needs the money, and he went to Zayd, Bakr, and 'Amr, saying, "Please give me four thousand." He gives it to him. If he went to the usurer and said, "Give me four thousand for one year," he would say, "At your service, my eye," but after one year, it becomes four thousand and five hundred. This is usury, which is forbidden and not permissible. But today, they placed the matter under the name of buying and selling, and it became lawful. This is like what the Jews did when they schemed regarding fishing on the Sabbath, and the story is known to everyone. But the Messenger gave us another example regarding the Jews' scheming. He said, peace and blessings be upon him, Allah permitted the Jews to slaughter permissible animals such as sheep, cows, and goats, and the like, but He prohibited their fats, except for the red meat, as the Exalted said: [An-Nisa 4:160] So what did the Jews do? They took the fats and put them in large pots and lit a fire underneath them until they melted and flowed and took another form. This became lawful, but it is the fat itself, in its very self, only its form changed. So they sold it and ate its price. He said, peace and blessings be upon him, . So usury is forbidden, and praise be to Allah, there is no one today who says usury is lawful openly, except through twisting and turning. One of these is the buy-back sale, but it is preceded, as we said, by installment sales. Because how can one reach the buy-back sale unless two prices are set: a cash price and an installment price? And thus the play is completed, as we described earlier. These people you are talking about, meaning, they took the form, no offense, in the understanding of the Jews. It is a formal issue. It is prohibited to have two sales in one sale. No, we do not sell two sales in one sale, but we sell one sale. We sell for cash alone and on installments alone. But if we revealed what is in their hearts, we would find that when they sell on installments, they have added the excess profit over the cash sale. And we have, meaning, a very strange example. Some merchants in some Islamic countries heard the narration: "The Messenger of Allah, peace and blessings be upon him, prohibited two sales in one sale", and they understood that it is not permissible for a merchant to demand an increase for installment sales. So what did they do? They abolished cash sales and made all sales on installments, but at what price? Installments are not at the cash price. But this one is not selling two sales, but that one is selling two sales, but separately. So if we understand that the Wise Lawgiver prohibited the increase for installments because it is... exploiting the need of the needy among the Muslims, and abolishing the benevolent loan in the dealings of Muslims with one another, and turning the Islamic society into a materialistic society like the disbelieving societies, such that there is no one who does good to his Muslim brother by being patient with him in repayment, except from... This is the wisdom behind installment sales, but it is not just a formal issue of two sales in one sale. No, the wisdom is as he, peace and blessings be upon him, said in the second narration: Sunan Abi Dawud 3461Hasan (Al-Albani). So the issue and the cause is not combining two sales at one time, but the cause is taking an increase for one of the two sales, and he called it usury.
Now are we going to prayer? Or are you going to be late? No, no...
The questioner : Regarding the topic of installments, some people... the refrigerator, and he goes and buys it on installments, and a person comes... half of the price he bought it for, the cause... with money.
The Shaykh : This is correct.
The questioner : ... they buy refrigerators and buy things, paying a down payment for them, and sell them for much less, about half the price they bought them for on installments, in order to get the money.
The Shaykh : This is a complete ruse. They are selling on installments, not selling for cash and on installments?
The questioner : No, they say, for example, "The Young Egypt Project on Installments." They have a project they call "Young Egypt," and they write in the newspapers and on television that it is on an installment basis.
The Shaykh : I understand this, my brother. Let me ask a question: Do they not sell for cash?
The questioner : Do they sell for cash in other projects, not in the same project?
Another questioner: ...
The Shaykh : In the cash project, do they not sell on installments?
The questioner : No, it is cash immediately.
The Shaykh : Well, why did they do this? This is a complete ruse, but it is superficial. They are twisting the narration about "two sales in one sale." The two forms you described do not constitute "two sales in one sale." They escaped the suspicion, but why did the Lawgiver prohibit the buy-back sale ('inah)? It is a sale, but its objective is to make usury permissible. So it did not benefit them to label the transaction of the buy-back sale as a sale. It did not benefit them, for indeed deeds are by intentions. The buyer intended this, and the seller aided him. In the end, in the final analysis, they intended to make usury permissible. Because this is the one who needs the money, and he went to Zayd, Bakr, and 'Amr, saying, "Please give me four thousand." He gives it to him. If he went to the usurer and said, "Give me four thousand for one year," he would say, "At your service, my eye," but after one year, it becomes four thousand and five hundred. This is usury, which is forbidden and not permissible. But today, they placed the matter under the name of buying and selling, and it became lawful. This is like what the Jews did when they schemed regarding fishing on the Sabbath, and the story is known to everyone. But the Messenger gave us another example regarding the Jews' scheming. He said, peace and blessings be upon him,
May Allah curse the Jews. The fats were prohibited to them, so they rendered them (into oil) and then sold them and ate their price. Indeed, when Allah prohibits the eating of something, He prohibits its price.
لعن الله اليهود حُرمت عليهم الشحوم فجملوها ثم باعوها وأكلوا أثمانها فإن الله إذا حرّم أكل شيئًا حرّم ثمنهFor wrongdoing on the part of the Jews, We made unlawful for them [certain] good foods which had been lawful to them
فبظلمٍ من الذين هادوا حرمنا عليهم طيباتٍ أُحلت لهمAnd indeed, when Allah prohibits the eating of something, He prohibits its price.
وإن الله إذا حرّم أكل شيئًا حرّم ثمنهIf anyone makes two transactions combined in one bargain, he should have the lesser of the two or it will involve usury.
من باع بيعتين في بيعة فله أوكسهما أو الرباNow are we going to prayer? Or are you going to be late? No, no...
The questioner : Regarding the topic of installments, some people... the refrigerator, and he goes and buys it on installments, and a person comes... half of the price he bought it for, the cause... with money.
The Shaykh : This is correct.
The questioner : ... they buy refrigerators and buy things, paying a down payment for them, and sell them for much less, about half the price they bought them for on installments, in order to get the money.