The 5% rule to purify wealth

#1

salaam , i can across a post on here something along time lines on

if investing in shares of a company who has interest bearing loans , the maximum one has to purify the profits is 5% , is this correct ?

jzk

#2

Wasalam

May Allah bless you.
The company’s haram income should not be more than 5% of its total income. You will purify your profits if there is anything between 0 and 5%. If the company’s haram income is more than 5% of its total income, then you should not be investing in such company.
Does that make sense?

#3

jazakallah that makes sense , the 5% is in relation to haram activities .

what is the rule regarding if a company , like most , has interest bearing loans , can you still invest in such company

jazakalah Sheikh

i have joined islamicaly app , but they require a fee based membership to see how it works and to get the “purification percentage”

#4

Have a read through this article, it will give explain how to do screening. IFG also has a course on this if I am not wrong.

#5

thanks for your reply

#6

Assalam u Alaikum Mufti sb,

Do you allow me to ask how this rule of 5% is derived?
To my understanding, haram is halal only when you can’t survive without it e.g. pork is halal if you are dying and have nothing else to eat. I know I’m oversimplifying but honestly I’m not convinced with 5% due to lack of knowledge so please enlighten me on this topic.

Jazakumullahu khairan

Shahzad

#7

Wasalam wr wb

There is no single proof in the quran or hadith allowing a 5% ratio for haram incomes when investing in shares.
However, scholars from all eras have derived rulings from sources other than the two mentioned aboved, in order to provide solutions to Muslims when they are facing situations which cannot be answered from a clear quranic verse or hadith.

Such is the situation with investing in shares, where contemporary scholars have, based on researches, tolerated this 5% haram income ( although the person must donate 5% of the income or profit away).

See this article from Mufti Faraz Adam for more information:

#8

Hi brother can you check a coin called FARB. i know it needs to have use case which i see this token having as it trying to provide use cases and using AI etc? wanna make sure i aint wrong