What is the ruling on taking an interest-based loan, whose interest is covered by the government, with the intention of allocating a percentage of the project's profits to be spent for the sake of Allah?
Source: FtawySummarized from the full answer at Ftawy · imported Sep 2, 2026
It is not permissible to take out an interest-bearing loan, even if the state will pay the interest, because there is a permissible alternative, which is dealing with Islamic banks through the permissible Tawarruq transaction. Furthermore, what Islamic banks do in terms of Murabaha and increasing the deferred price over the spot price is permissible and not usury.
Summarized from the full answer at Ftawy · imported
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- Ftawy
- Original fatwa ID
- 180400
- Imported
- Translation status
- Source text, unreviewed
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