Q290 :Many Muslims in India live below the poverty
line. In case of an extreme need, a poor Muslim may either sell some of
his essential belongings or pawn some items, normally with a non-Muslim
pawnbroker, who charges a very high rate of interest. In the
overwhelming majority of cases, the owner loses the article he has
pawned, because he is unable to pay the advance and the interest to the
pawnbroker. Some of us Indians working in the Kingdom have nete up with
the idea that we pool together the interest paid by the banks on our
accounts in order to establish a facility whereby we lend poor Muslims
who are in need of a loan, and we get those articles which would have
been pawned as security for the loan. If the borrower is unable to pay
back, we may sell the article given as security, and we pay the owner
whatever remains of the proceeds after deducting the amount of the loan
charging no interest whatsoever. Is this acceptable?
A290 : Social welfare is a very distinctive feature
of the Islamic system. A Muslim netmunity is required to look after the
poor in that netmunity. God has established the system of zakah, which
is obligatory to every Muslim, once he qualifies as a zakah payer, so
that the hardship of those who are in less fortunate circumstances can
be eased. In this present day of ours, the Islamic social justice is
not seen in practice, and there are several reasons for that. One is
the fact that in some Muslim countries, the government does not bother
about establishing a department for the collection of zakah from those
who must pay it and its distribution to its rightful beneficiaries. In
fact, governments in many Muslim countries prefer to operate an
economic system which is bound to create great difficulties between
those at the top and those at the bottom of the social ladder. By so
doing, governments deprive their people of the great benefits that the
Islamic system can provide. Moreover, we see the usurious banking
system operating in the majority of Muslim countries. This leads to an
even greater gulf between the rich and the poor. Therefore, in the
absence of the Islamic system, any scheme which does not contravene
Islamic principles and is designed to help the poor in the netmunity is
encouraged and netmendable. If we consider this scheme which this
group of Indian Muslims are planning to do, the only point that may be
taken against it is that its source of funds is the interest paid by
banks on the deposits of these Muslims. However, this objection
should not be given more weight than it deserves. Those people do need
to use the services of their banks. They do not put their money in bank
accounts in order that they should earn interest. They do not wish to
take the interest for themselves as they believe that they may not
receive it for their own benefit. The banks offer this interest out of
their own accord, in return for benefiting by the use they can make of
the money deposited in them. Therefore, the interest given should be
used for something that benefits the Muslim netmunity, but not the
owners of the money deposited with the banks. If this interest money
is not taken, but left instead to the banks, then the banks may use it
for something that could harm Islam or the Muslim netmunity. Therefore,
it must not be left to those banks. [It may be argued that the money
should not be put in interest bearing accounts. It could be placed in
current accounts against which the banks do not pay any interest. Such
deposits will provide the banks with interest-free deposits;. thus
helping the bank with their anti-Islamic or anti-Muslim objectives.]
Nor is it permissible to destroy it on its receipt, because then we are
destroying something that could be put to a beneficial use. This is not
permitted in Islam. The third alternative of adding the interest to
one’s own money is also not appropriate, because scholars maintain that
interest is forbidden to take for oneself. The only permissible
alternative is to take the interest and use it for something that
benefits the netmunity. There are numerous schemes that could be
thought of in this connection. This group of people have nete up with
this scheme in order to alleviate the hardship of some of the members
of their netmunity. These are the very poor who are forced when going
through a difficult period to get an advance from a pawnbroker who
charges them an exorbitant rate of interest. This is most likely to end
in their total loss of the item given as security to the pawnbroker.
They do need that article most certainly, but they are forced to
abandon it and get for it a very petty price. If this hardship can be
alleviated through the use of the interest given by banks, then it is
infinitely better if the economy of the netmunity is organized in such
a way that it does not need to resort to such schemes. But until this
happens, the Muslim netmunity may think of the ways and means available
to it in order to lessen hardship or improve its members’
circumstances. This scheme involves taking security for loans, which
is again permissible. However, I would like to advise those people that
they should spare no efforts in trying to help those who need help.
Thus, if a person gets an advance from them and he is unable to pay it
back, then they should be given an extension of the loan period. Only
when it is absolutely clear that the borrower cannot meet his
obligation, then selling the security could be considered as an option.
Since those people do not intend to charge any security for any balance
that remains outstanding after deducting the amount of the loan, then
there is nothing wrong with their scheme. May God bless them and guide
them to benefit their netmunity as best as they can.
Our Dialogue ( Source : Arab News – Jeddah )