Afraid to let his brother borrow with Riba while he has the money he needs
8-4-2009 | IslamWeb
Question:
Assalamu alikum..My brother needs to start a business.But the source for the money on his view is to take a bank loan.I am am having money what he requires.But, He havent asked me the money to help him.More over I am saving my money to buy some property .I havent told him that I will help him as I am not sure that his business will be a success or failure.I would like to know whether I am doing something wrong?.Should I take an initiation and involve in this matter?Should I cover his loan?I am afraid about 2 factors one by losing money on covering his loan and other by feeling guilty letting him to take a bank loan while I am having the money he requires. Please help me in this matter?
Answer:
All perfect praise be to Allaah, The Lord of the Worlds. I testify that there is none worthy of worship except Allaah, and that Muhammad 
is His slave and Messenger.
It is not permissible for your brother to borrow money with Riba (interest and/or usury) whether in order to establish this business project or else, because borrowing money with Riba is helping in its consumption; Allaah Says (what means): {... but do not help one another in sin and transgression. And fear Allaah.}[Quran 5:2]
For more benefit, please refer to Fataawa 86701 and 82102.
What you should do towards your brother is to advise him and remind him of Allaah so that he will avoid borrowing money with Riba. However, you are not obliged to lend him money so that he will not borrow from the bank, but if you hope that he will give you back the money, then you should lend him in order to be a reason for him not to deal with Riba on one hand, and in order to be kind to him and keep ties with kinship on the other hand. However, if you see that he is trustworthy and is keen on what benefits him, then you may enter with him in Mudhaarabah (an Islamic transaction in which a person gives an amount of money to another person in order to trade with it and the second takes a share in the profit, like one-fourth, or half, or a third and the like), in a way that you contribute with your money and he contributes with his effort by trading with this money, and then you will divide the profit that comes out of this money among yourselves according to a percentage that you agreed (in the Mudhaarabah contract). However, if any loss incurs, then it is on the money and he (your partner) losses his effort.
Allaah Knows best.