Ruling on subsidy - concession Loan

*Ruling on subsidy - concession Loan*

⭕Today's Question no. 965⭕
To reduce unemployment,  government have come up with a scheme of providing loan to purchase machines, truck, tempo etc with an exemption of 25% amount. The remaining balance amount is considered as loan and has to be returned on 10% interest rate weekly. Is it permissible for Muslims to avail such a subsidy loan?

⭕Answer⭕

As far as we know, the intention of the government to provide such a loan scheme is to reduce unemployment and to help the poor and needful and therefore a part of the amount is not to be returned (known as subsidy). The intention of such a scheme is not to charge interest and so if a person takes such a loan of which certain amount is forgiven and remaining balance amount to be returned with interest, and the amount is equal to the subsidy amount and extra amount is not to be paid by the individual, then it is to be considered that a certain amount is given to a needy person and then that person returns it back. However, if the returning amount is greater than the taken loan, it will be considered as interest which is not permissible.

📙FATAWA RAHEEMIYAH KARANCHI 9/233

📙NIZAMUL FATAWA 3/138

And Allah swt knows best

Mufti Imran Ismail Memon.

Ustaze Darul Uloom Rampura, Surat, Gujarat, India.