Interest on loans

Answered according to Hanafi Fiqh by

If I have earned interest on loans, and I have no way to dispose it off. 1. Is it permissible to deposit it in the bank account of some institution which treats poor people and in the bank account of someone who has made appeal for financial help on account of his illness etc.

2. Is it permissible to open such an account in which we can collect the interest earned by the people and use the said amount for social services or to give interest free loans to loans to unemployed.


In the Name of Allah, the Most Gracious, the Most Merciful.

As-salāmu ‘alaykum wa-rahmatullāhi wa-barakātuh.

It is not permissible to open up an account specifically to earn interest even if the intention is noble, to provide social services and empower people.


If by chance and subordinately, one received interest due to using the bank facility out of personal need, then the interest accrued should be disposed to the poor and needy. This maybe done personally or even depending on reliable institutions to dispose of it on your behalf. In the enquired case, if the institution is reliable and serves the needs of the people, then interest monies should be given to those institutions to dispose of on your behalf.


Likewise, if a person needs financial help due to ill health, interest may be dispensed to his account. In this case, it is important to ensure that the person is poor and needy. [1]


Interest monies cannot be given as loans. They have to be dispensed to the poor and needy.


And Allah Ta’āla Knows Best

Mufti Ebrahim Desai.






[1] Contemporary Fatawaa, Pg.242, Idarah e Isalamiat.



The Darul Iftaa Indigenous Upliftment Project



بِسْمِ ٱللهِ ٱلرَّحْمٰنِ ٱلرَّحِيم





Whether local or abroad, every Muslim is the Ummati of Rasulullah (sallalahu alayhi wasallam). While there are some organisations assisting the needs of Muslims locally and abroad, the Darul Iftaa has considered the need to empower some unattended communities of our indigenous people with basic and religious needs. This has been emphasized recently by many senior persons from the business and political sectors.


There is consensus that contributing to the upliftment of the indigenous community is a religious obligation upon us and will bod​e well for Muslims and Islam in South Africa.​


The Darul Iftaa will accept your kind contributions for this most worthy and greatly rewardingproject. When making deposits for this project, specify with “I.U.P” {referring to indigenousupliftment project}.



The Darul Iftaa Banking Details are as follows:

Bank:              FNB Bank

Account#:     62347912778

Branch:           221126




The Darul Iftaa is registered and has the following PBO exemption number: 930039227 – 3 May 2012


Kindly contact the Darul Iftaa before depositing your monies should you wish to procure a section 18 A Certificate. ​

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You may also donate online here:





Mufti Ebrahim Desai