In a commodity market, lending can take place in two forms:

  1. A company might lend to another company with the condition that the repayment is inclusive of an interest amount. This method is not permissible.
  2.   A company might lend to another one without the condition of interest payment. This method can be divided into two categories:
  • The company charges a brokerage fee for lending. This is not permissible, and the fee will be considered as equivalent to an interest payment.
  • The company does not charge anything in return for the lending. This method is permissible.

And Allah knows best!

(Mufti) Billal Omarjee