How is fixed percentage halal? How does Murabaha work?

Interest or Riba happens when a fixed extra amount is charged on a set sum of money.

Murabaha is a common Islamic financing method where a financier buys an asset and sells it to a customer on a deferred payment basis, earning a profit margin.

The profit is charged on sale of product and has to be fixed beforehand for Shariah compliance.

Updated on: 19/10/2025