“And others travelling through the land, seeking Allah’s bounty.” [al-Muzzammil: 20]

This is because, in pre-Islamic times, a man would entrust his wealth to another on condition that he travel with it to Syria or elsewhere and purchase merchandise under this arrangement. The Companions’ statement to ‘Umar ibn al-Khattāb, may Allah be pleased with him, concerning his two sons, ‘Abd Allāh and ‘Ubayd Allāh—“Why not make it a qirād?”—demonstrates the linguistic validity of this designation. The Companions, may Allah be pleased with them, were masters of the language and eloquence. If the words of Imru’ al-Qays and al-Nābigha are accepted as linguistic evidence, then the words of these Companions are more deserving of acceptance and carry greater weight.

Section

Among the proofs for the permissibility of qirād are the words of Allah, Almighty and Majestic:

“O you who believe, do not consume one another’s wealth unjustly, but only through trade by mutual consent. And do not kill yourselves. Indeed, Allah is ever Merciful to you.” [al-Nisā’: 29]

And His words:

“Do not consume one another’s wealth unjustly, nor offer it to the authorities.” [al-Baqarah: 188], to the end of the verse.

This is because qirād is a form of trade. It was practised in pre-Islamic times and was upheld in Islam because necessity called for it: people need to manage their wealth and increase it through trade, yet not everyone can do this himself. A person may therefore have to appoint someone else to act on his behalf. He may find no one willing to work with his wealth for a wage, since customary practice in such matters is qirād. It was thus permitted because of this necessity and, on these grounds, exempted from the prohibition on hiring for an unspecified remuneration. Comparable concessions were granted for crop-sharing contracts for tending orchards, ‘ariyya sales, sharing in purchases of foodstuffs, and transferring such purchases at cost. On this basis, it became an established sunnah. Thus, the Muslim community does not disagree over its permissibility in principle, although scholars differ over many of its conditions and rulings. The Companions and the early generations practised it, and later generations followed them in doing so.

Section

The first qirād in Islam was that of Ya‘qūb, the freedman of al-Hadaqa, with ‘Uthmān ibn ‘Affān