Is P2P lending halal?
Conventional P2P lending is interest income by definition — you are the bank, collecting riba directly from borrowers.
P2P platforms disintermediate the bank but keep the contract: loans repaid with interest, now flowing straight to you. If anything the analysis is starker than a savings account — there's no ambiguity about where the yield comes from.
The permissible cousin is profit-sharing finance: platforms structured on murabaha, ijara, or musharakah where returns come from trade margins or shared profits with genuine loss exposure. A handful operate in Islamic-finance markets; evaluate their contracts, not their branding.
The compliant alternative
Equity crowdfunding of screened businesses; Islamic profit-sharing platforms where genuinely structured (verify contracts).
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What if the borrower uses the loan for something good?
Purpose doesn't cure riba — the prohibition attaches to the interest contract itself. Interest-free benevolent loans (qard hasan) are the praised form of lending, and they earn no return by design.
Related
Educational summary of commonly held scholarly positions — not a fatwa or financial advice. Where scholars differ, we say so; for a binding ruling on your situation, consult your scholar. See how Penny screens.