Line of Credit
By Mufti Taqi Usmani
Posted: 3 Rajab 1422, 21 September 2001
| Q.) I want to know, what is an alternate to Bank Line of Credit to
expand business in North America. I have a business and I can help myself and other Muslim
brothers if I expand it. To do so, I need line of credit. Let me know if it is ok. If I
don't take LOC, then I may have to shrink my business day by day and close one day. I need
detailed answer please. Shukran and Jazak Allah Khairan. [Ashraf Siddiqui] |
A.) Any credit line based on interest is not allowed in Shariah.
However, there are many Islamic modes of financing on the basis of which a credit line may
be taken. Some of the big international banks like Citibank and HSBC etc have started to
act on these modes on a limited basis. If you are able to convince them to give you a
credit line on that basis then this is the only solution.
For details about Islamic modes of financing, you can consult my book "An
Introduction to Islamic Finance."
Note: This book is
available at the Albalagh Bookstore.
Q & A