Answer
Asalamu Alaikum,
Thank you for contacting About Islam with your question.
Dr. Shabir Ally addresses this question in the video below:
Transcript:
Aisha Khaja: So, Dr. Shabir, the question that we’ve received from our viewer today is: in a previous episode you talked about interest and the idea that giving interest is permissible. So, can you provide some references and explain how this is possible?
Dr. Shabir Ally: Well, we wouldn’t say it in that general way the giving interest is permissible.
What I refer to is that the European Fatwa Council, which is a council made up of scholars from around the globe, but who study issues pertaining to Muslims living in North America and Europe and other, as minorities in some of these developed countries.
And what they have said is that in order for Muslims to be able to buy a house in these countries, it would have been impossible had it not been for some relaxation that is possible from within the Islamic rulings.
And they looked at the differentiation between giving and taking interest. They say that the Quran absolutely condemns taking interest. But the Quran doesn’t actually condemn giving interest.
The condemnation of giving interest, or the condemnation against giving interest is mentioned the hadith which equates five people: the one who gives, the one who takes, the two who witnessed the contract, and the one who writes it [to be accountable for the sin].
But, they say that despite this, we cannot equate the two because one is oppression, that is taking the interest, and the other one is given by because of some necessities. So, we don’t say that generally giving interest is permissible.
But, we say that because of the obvious difference between the giving and taking of interest, in order to be able to buy a house in a country like this, the scholars ruled that it is permissible to go with a conventional mortgage.
Aisha Khaja: And I guess that also might relate to things like OSAP [Ontario Student Assistance Program] and taking OSAP for student loans and that kind of thing.
Dr. Shabir Ally: Yes.
I hope this helps answer your question. Please keep in touch.
Walaikum Asalam.
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