I want to know about subsidizing loan sanction by the government under some scheme to minorities. It is the scheme run by the government on certain sectors. The scheme is: 25% amount of the scheme will be paid by the government and 75% of the loan will be directed to any bank to pay on interest. If we calculate the interest repayment it comes to nearly 25% which is already paid by the government. It means we get a loan with no interest and we have to pay only the principle amount. This type of loan scheme is only for particular sectors and eligibility criteria. As these types of schemes are particularly for minority community and many Muslims involve in it. Can this be halal? Please enlighten to us.
Answer
(Fatwa: 1985/431/D=1432)
If you are satisfactorily sure that you will be able to pay the loan within the prescribed period and the interest amount will not exceed the government subsidy, then it is allowable to take loan availing such schemes. But, if you fear that the interest amount may exceed the govt subsidy, then it is better to avoid.
Allah (Subhana Wa Ta’ala) knows Best
Darul Ifta,
Darul Uloom Deoband