Subsidizing a loan sanction by the government

Answered according to Hanafi Fiqh by Muftionline.co.za

Q: 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.


A: It is not halaal.

And Allah Ta’ala (الله تعالى) knows best.


Answered by:

Mufti Ebrahim Salejee (Isipingo Beach)


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