Ethica Institute of Islamic Finance™

Is it permissible to provide investment consultancy services at a company that solicits interest-based loans for its clients from conventional banks and carries out feasibility studies for investments based on these interest-based loans?

There are two considerations with respect to the permissibility of working in such a company; timing and level of involvement.

Timing - If one assists in an impermissible transaction before the point of execution, one may fall into the impermissible. If one merely records an impermissible transaction that has already been executed (ie. postmortem auditing and accounting), one does not fall into an area of clear prohibition, though the scholars state that this is better to avoid.

Level of involvement - If one is involved in initiating, proposing, assisting, or executing an impermissible transaction, one is culpable.

Since the company facilitates in obtaining of interest-based loans for its client and advises on them, providing investment consultancy services for such a company would be equivalent to assisting in prohibited transactions and, therefore, impermissible.

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