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Can I get a govt. loan for business? Interest-free for Muslims?

Answered as per Hanafi Fiqh by Darulifta-Deoband.com
I want to know is it ok to take a loan from govt organisations who give subsidies. for example maulana azad financial corp.or any other govt body for business. also please tell me if we muslims have any organisation which give interest free loan for home or business.I already have a home loan so i want to get rid off it.please let me know at the earliest. i know you have lot of questios in que..


(Fatwa: 910/717/D=1431)

In taking loan, you will have to pay interest, while both taking and giving interest is haram. However if the number of total interest is equal to subsidy, the calculation would be equal and you will not get the sin of paying interest, you will be committing the sin of doing interest based dealing only. If the amount of interest is less than the subsidy amount then too the ruling is same. Yes, if it exceeds the subsidy amount then you will be getting the sin of paying interest and doing interest based dealing and the evils of interest would creep into the business:

يَمْحَقُ اللّهُ الْرِّبَا وَيُرْبِي الصَّدَقَاتِ وَاللّهُ لاَ يُحِبُّ كُلَّ كَفَّارٍ أَثِيمٍ [البقرة : 276]

(2) It is not in our knowledge.

Allah (Subhana Wa Ta’ala) knows Best

Darul Ifta,
Darul Uloom Deoband

This answer was collected from the official ifta website of Darul Uloom Deoband in India.

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