Charging a fee for lending people money
10-1-2005 | IslamWeb
Question:
I am from subcontinent and I live in Middle East. I am intending to do a business. Please let me know if this business is Halaal or not. Some people from my country living in Middle East face financial difficulties and they ask me when they need money. For example, if a person needs 500 Dinars, I will give them 490 Dinars and they will pay the equivalent of 500 Dinars in Rupees to my home. Thus I gain a profit of 10 Dinars per person. I want to do this as a business as many people approach. Is it Halaal to do this business?
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. We ask Allaah to exalt his mention as well as that of his family and all his companions.
What you are doing is selling currency with another currency, this is what the jurists
call money exchange. However, it is not correct to exchange money unless it is done hand to hand, that's to say, the other party gives you a currency and he takes in exchange the equivalent in another currency immediately in the same meeting without delay. As long as the currency is different there is no harm and it is permissible to exchange 500 in one currency with 490 in another currency. The Prophet 
said: "Gold for gold, silver for silver, wheat for wheat, barley for barley, dates for dates and salt for salt, the analogous by their analogous, the same amount by the same amount exchanged immediately from hand to hand. But if these kinds are different, trade as you wish but immediate exchange from hand to hand." Therefore, the transaction that you are doing is not permissible because it is a sale on credit. The solution is to have an agent in your country and the other party should have an agent as well then at the same time the exchange would take place through the phone, meaning at the same time you give him the money you would have an agent in your country who would receive the exchange.
Allaah knows best.