Hadith 38445

Yahya said that Malik said, "No one should make a qirad loanexcept in coin, because the loan must not be in wares, since loaningwares can only be worked in one of two ways:
Either the owner of thewares says to the borrower, 'Take these wares and sell them. Buy andsell with the capital realized according to qirad.' The investorstipulates increase for himself from the sale of his goods and whatrelieves him of expenses in selling it. Or else he says, 'Barter withthese goods and sell. When you are through, buy for me the like of mygoods which I gave you. If there is increase, it is between you andme. 'It may happen that the investor gives the goods to the agent at atime in which they are in demand and expensive, and then the agentreturns them while they are cheap and he might have bought them foronly a third of the original price or even less than that. The agentthen has a profit of half the amount by which the price of the wareshas decreased as his portion of the profit. Or he might take the waresat a time when their price is low, and make use of them until he has alot of money. Then those wares become expensive and their price riseswhen he returns them, so he buys them for all that he has so that allhis work and concern have been in vain. This is an uncertaintransaction and is not good. If, however, that is not known until ithas happened, then the wage an agent in qirad would be paid forselling that, is looked at and he is given it for his concern. Thenthe money is qirad from the day the money became cash and collected ascoin and it is returned as a qirad like that."