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Should I Emigrate If No Islamic Banks Available?

31 March, 2017
Q As-salamu `alaykum. I live in a non-Muslim country in which there are no Islamic banking possibilities. (It seems that the population is too small to warrant any of the banks here to offer Islamic banking services).1- Is it permissible under such circumstances to resort to taking a loan to buy a house or car?Can you, please, let me know if there are any rulings on this matter? 2- Also, is it permissible to sign up for private pension insurance again under the circumstances that there are no Islamic alternatives?I have read on some other Islamic websites opinions which recommend the Muslim to move to an Islamic country or a country where there is Islamic banking. But this is not possible for everyone. I am quite worried, I know what we should avoid any non-Shari`ah compliant banking methods and I wish to avoid committing a sin by taking such loans. Thank you very much, Jazakum Allah khayran.

Answer

Wa `alaykum as-Salamu wa rahmatullahi wa barakatuh.

In the Name of Allah, Most Gracious, Most Merciful.

All praise and thanks are due to Allah, and peace and blessings be upon His Messenger.

Dear brother, you are to be commended for your keen desire to follow the financial rules. We pray to Allah to make it easy for you to finance yourself and your family from lawful (halal) sources, amen.

Muslims can live in a non-Muslim country as long as they are allowed to practice the fundamental rituals of Islam.

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If renting a house is not available, you can resort to banking mortgage providing that there is no Islamic finance facility available.

As for insurance, it is permissible according to takaful (Islamic insurance). If that is not available, then insurance is permissible.

Responding to your question, Prof. Dr. Monzer Kahf, Professor of Islamic Finance and Economics at Qatar Faculty of Islamic Studies, states:

As for the first question, Muslims who live in the West or non-Muslim country need not to move to any other countries unless the law prevents them from practicing the fundamentals of their religion. These are circumstances, economic and otherwise, that require many Muslim families to live in Western countries and they enjoy fair laws.

The prohibition of riba (usury), like all other rulings of Shari`ah, is not intended to make life difficult, but rather to prevent injustice and make social life better and fairer.

The issue of housing and other necessities of life was discussed in several collective meetings of the Shari`ah scholars and there are several Shari`ah opinions which conclude that decent housing, being a necessity for all families, can be obtained either by buying or renting and when one needs a residence, if renting is either not available or not suitable for financial or any other reasons, resorting to conventional banking mortgage is permissible provided there is no Islamic finance facility available.

The principle of necessity applies to all other matters. I believe that buying a car in Austria is not necessary unless it is required for work which is the main source of income (like plumbers who go from house to house with their load of tools and equipments). Also housing may not be in some countries a real necessity if renting in decent areas is available at reasonable fares. What matters is that one should make his/her own judgment keeping in mind that the Questioner (Allah) is Most Knowledgeable.

Regarding the second question about private pension insurance, I need more details. The principle is that insurance is permissible on the basis of takaful (Islamic insurance).

If takaful is not available, taking conventional insurance (car, hazard, life, pension, etc.) is permissible if needed.

I believe that Muslims who live in Western countries and in countries where community troubles and conflicts exist such as India, should take all kinds of insurances even with conventional companies, when Islamic insurance is not available. When insurance is required by law, Muslim must take it anyway.

Further, in private pension insurances there are usually choices of what you invest in. One should then choose shares which have minimum impermissibility as much as possible and estimate the part of the return which comes from non-permissible uses and give this part away to Muslim charity.

Remember that the issue of insurance itself is disputed among Muslim scholars. Some of the most respected scholars argue that it is permissible if it does not contain interest. In other words the issue of insurance is not as strong as the issue of prohibition of interest.

Allah Almighty knows best.

About Prof. Dr. Monzer Kahf
Dr. Monzer Kahf is a professor and consultant/trainer on Islamic banking, finance, Zakah, Awqaf, Islamic Inheritance, Islamic estate planning, Islamic family law, and other aspects of Islamic economics, finance, Islamic transactions (Mu'amalat). Dr. Monzer Kahf is currently Professor of Islamic Finance & Economics at the Faculty of Economics and Management, Istanbul Sabahattin Zaim University, Turkey