The government of a country has announced a social welfare scheme under which an interest-free loan is provided to nationals who wish to avail themselves of the scheme, in order to construct villas for their own residential purposes only

Fatawa Question

The government of a country has announced a social welfare scheme under which an interest-free loan is provided to nationals who wish to avail themselves of the scheme, in order to construct villas for their own residential purposes only. An Islamic bank has been mandated by the government to provide the interest-free loan amounts to the citizens. Also, the government has authorized the bank to provide additional funding if the cost of construction exceeds the approval granted by the government to each citizen. Such additional funding shall be on commercial basis, allowing the Islamic bank to earn profit over the financed amount. A suitable Shariah structure is required to finance the amount over and above the interest-free loan granted by the government.

Fatwa

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Publisher

Islamic Finance News

Publication Date

2014-05-14

Country of Publication

Malaysia

Main Subjects

Economics & Business Administration
Islamic Studies

Data Type

Fatawa

Language

English

Record ID

BIM-783546

• APA
• MLA
• AMA