Does Indemo.eu Work? (From a Sharia Perspective: No)

Based on the information provided on its website, Indemo.eu’s operational model appears to function as designed, connecting investors with loan and debt investment opportunities and facilitating returns based on those mechanisms. However, from a critical Sharia perspective, the question “Does Indemo.eu work?” shifts from mere operational efficiency to ethical permissibility. And on that front, the answer is a resounding no, it does not “work” in a way that is acceptable for a Muslim investor.

Read more about indemo.eu:
indemo.eu Review & First Look
Indemo.eu Features (Ethical Considerations)
Indemo.eu Pros & Cons (Focus on Cons for Ethical Investing)
Indemo.eu Alternatives

The Operational “Workings” (Conventional View)

From a purely mechanical and conventional finance standpoint, Indemo.eu seems to operate with a clear process:

• Funds Collection: Investors deposit funds into segregated accounts.
• Investment Allocation: Funds are then allocated to specific “Mortgage Loan Investments” or “Discounted Debt Investments.”
• Loan Servicing/Debt Recovery: The underlying loans are serviced (payments collected) or the “bad debts” are managed (property sale for recovery).
• Returns Distribution: As per their model, “interest” or “expected returns” from the sale of attached real estate are distributed back to investors. The website explicitly states “€1.7M Totally Repaid” and an “Average Annual Return” of 25.3%, implying that the system successfully generates and distributes profits to its investors.
• Regulatory Framework: The claim of being “Fully licensed and regulated in the EU” suggests adherence to established financial regulations, implying a degree of oversight and legal framework to ensure operational integrity within conventional finance.

Why It Doesn’t “Work” for a Muslim Investor (Sharia View)

The fundamental flaw in Indemo.eu’s model, rendering it unsuitable for a Muslim, lies in its reliance on prohibited financial practices:

• Riba (Interest): The platform explicitly highlights “Interest — 10.0% per annum” for its Mortgage Loan Investments. Riba, or interest, is unequivocally forbidden in Islam, being considered an exploitative gain from lending money rather than from productive enterprise or genuine risk-sharing. Any investment model that is based on fixed interest rates, whether received or paid, is impermissible.
• Trading of Debt and Speculation: The “Discounted Debt Investments” (DDIs) involve profiting from the acquisition and subsequent recovery of “bad debts.” This mechanism is problematic because:
  • Debt is Not a Commodity: In Islamic finance, debt (Dain) is generally not considered a commodity to be traded for profit. Its value is fixed to its face value, and trading it at a discount or premium is typically prohibited.
  • Gharar (Excessive Uncertainty): Investing in DDIs involves a degree of Gharar (excessive uncertainty) regarding the recovery of the debt and the sale price of the underlying property, which is compounded by the fact that the original debt may have been interest-bearing.
  • Maysir (Gambling): The speculative nature of profiting from distressed debt, where the outcome is not directly tied to a productive process but rather to the unpredictable recovery and asset liquidation, can lean towards Maysir (gambling).
• Lack of Profit-Loss Sharing (PLS): Islamic finance advocates for risk-sharing partnerships (like Musharakah or Mudarabah) where both the investor and the entrepreneur share in the profits and losses of a venture. Indemo.eu’s fixed or expected returns on loans do not embody this principle, as the investor is shielded from true entrepreneurial risk, or the risk is disproportionately shifted.

The Illusion of Security and Returns

While Indemo.eu emphasizes EU regulation, investor compensation schemes, and asset backing, these conventional safeguards do not transform impermissible earnings into permissible ones.

• Regulation for Conventional Finance: EU regulations are designed for the conventional financial system, which inherently includes interest-based lending. Compliance with these regulations does not imply compliance with Islamic principles.
• Asset Backing of Impermissible Debts: Even if the loans are “backed by Spanish real estate,” the method of profiting from these loans (interest or debt trading) remains the issue. The asset backing provides security for the underlying debt, but it doesn’t legitimize the forbidden income stream.

In conclusion, while Indemo.eu may “work” effectively in the conventional financial sense by generating returns for its investors, it fundamentally fails to “work” for a Muslim investor seeking Sharia-compliant investment opportunities.

Its operational model is built upon principles that are explicitly forbidden in Islamic law, rendering it an unsuitable platform for ethical wealth accumulation for this demographic. Indemo.eu Alternatives