Mufti Online — Madrasah Ta'leemuddeen

Calling interest "service charge"

· 15 Muharram 1448 AH1 min readEnglish

Question

There is a government youth development department here. There is a loan project and it was declared on the terms 9% service charge for women with no Riba.

9% at gradually low rate.

Is working as a youth development officer halaal there or taking the loan?

It’s a charitable government department but yet there is that 10% service charge for men, 9% service charge for women, etc. rate for other gender.

Answer

When they are asking people to pay back more than the loaned amount, then this extra amount they are asking for is riba, even though they are calling it a service charge. You should refrain from taking this riba based loan from the government.

And Allah Ta'ala (الله تعالى) knows best.

Answered by
Mufti Zakaria Makada
Checked & approved by
Mufti Ebrahim Salejee (Isipingo Beach)
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Source: Mufti Online — Madrasah Ta'leemuddeen — https://muftionline.co.za/node/36765
Fatawa SA: https://fatawa.co.za/fatwa/muftionline-36765

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