Earlier in the below link you had mentioned that Invoice discounting is un lawful https://darulfiqh.com/is-invoice-discounting-permissible/
but I had gone through lot of articles and videos where there is no mention of Interest anywhere and the process is straight forward. Moreover there are platforms available now where you direct buy invoice instead of depositing money into some financial institution and they buy for you. I feel this process is like I am getting product on discounted price and I am reselling it on actual price after sometime.
You buy invoice on discount and get resell it for actual price. You benefit from discount. Let me know where is Riba involved here. I don’t see bank involvement here except for transactions. Please clarify [Question published as received]
In the Name of Allah, the Most Gracious, the Most Merciful
Conventional invoice discounting is not Shariah compliant. It involves the sale of debt with discount, which is a form of Ribā also. Even if interest is not mentioned in the charges, Ribā is still involved as the sale of debt with discount is prohibited.
Debt reselling refers to the act of collecting and reselling of due debts. It is a sale of payable right or receivable debt, either to the debtor themselves or a third-party financier. The purchaser would buy the debt from the creditor for an immediate price – usually a lower value or a percentage of the face value of the debt then collect the whole debt from the debtor thereby making profit.
Reselling due debts, or invoices in this particular scenario, is referred to in Shari’ah as Ba’i Ad Dayn. In such a financial arrangement, the financier would assume the debt from the creditor for an immediate discounted price and thereafter collect the entire credited total from the debtor, thereby making a profit. This profit is Ribā.
This is identical to a usurious transaction and is deemed impermissible. Any transaction involving the sale of money is required to be conducted at face value and without any inflation or reduction, for the transaction to be in conformity with Islamic principles.
And Almighty Allah Alone Knows Best
Maulana Ammar Y Badat
Reviewed and approved by
Mufti Faraz Adam
Darul Iftaa Muadh ibn Jabal
The views and opinions expressed in this answer belong only to the author and do not in any way represent or reflect the views of any institutions to which he may be affiliated.
Arguments and ideas propounded in this answer are based on the juristic interpretations and reasoning of the author. Given that contemporary issues and interpretations of contemporary issues are subjective in nature, another Mufti may reach different conclusions to the one expressed by the author. Whilst every effort has been taken to ensure total accuracy and soundness from a Shari’ah perspective, the author is open to any correction or juristic guidance. On the event of any juristic shortcomings, the author will retract any or all of the conclusions expressed within this answer.
The Shari’ah ruling given herein is based specifically on the scenario in question. The author bears no responsibility towards any party that acts or does not act on this answer and is exempted from any and all forms of loss or damage. This answer may not be used as evidence in any court of law without prior written consent from the author. Consideration is only given and is restricted to the specific links provided, the author does not endorse nor approve of any other content the website may contain.
وَالْخَامِس وَالْعشْرُونَ عَن بيع الدّين بِالدّينِ وَهُوَ ان يكون لرجل دين من ثمن مَتَاع بَاعه مِنْهُ اَوْ قرض من حِنْطَة اَوْ شعير اَوْ شَيْء من الْوَزْن فيبيعه من رجل اخر اَوْ من ذَلِك الرجل نسيئا فَأن ذَلِك لَا يجوز ـ(ص 475 – كتاب النتف في الفتاوى للسغدي)
وعَلى هَذَا الْقِسْمَة إِذا قعت فِيمَا يجْرِي فِيهِ الرِّبَا لَا تجوز مجازفة فِي الْجِنْس الْوَاحِد وَتجوز فِي مختلفي الْجِنْس (ص32 – كتاب تحفة الفقهاء – باب آخر منه أصل الباب)
وإن لم ينقد واحد منهما حتى تفرقا لم يجز؛ لأن هذا دين بدين، فإذا اشترى ديناراً بدراهم وليس عند هذا دينار ولا عند هذا دراهم فنقد أحدهما وتفرقا لم يجز؛ وإذا اشترى شيئاً بدين وهما يعلمان أنه لا دين عليه لا يجوز الشراء، ويكون هذا بمنزلة ما لو اشترى بغير ثمن؛ لأنه سمى ما لا يصير ثمناً (المحيط البرهاني في الفقه النعماني)