Can a Loan Be Taken to Build a Masjid?

Question

We are trying to buy a building for our community. We must pay a deposit and show £2m in the bank. We have raised £500000.

We are struggling to raise the funds. We have been praying in a church hall for over 20 years. We need a sponsor or to borrow money from the bank short term.

Is there a Fatwa or allowance to do that?

Answer

In the Name of Allah, the Most Merciful and Compassionate.

May Allah alleviate our difficulties and guide us to what pleases Him. Amin.

Interest-free loans from community members or business owners may be taken to help purchase the building. Taking riba-based loans is strictly prohibited in Islam for anyone and, therefore, even more prohibited for places of worship. Having a dedicated space for worship is a legitimate need, but legitimate ends do not justify illegitimate means in Islam, and Allah knows best.

Severity of Riba in Islam

The Quran severely warns against riba (interest), stating that those who engage in riba will not stand on the Day of Resurrection except like the standing of a person beaten by Satan leading him to insanity. [Quran, 2:275]

Additionally, Sayyiduna ‘Abdullah Ibn Salam (Allah be pleased with him) reports that the Prophet (Allah bless him and give him peace) stated that earning one dirham of riba is worse than fornicating thirty-three times. [Tabarani]

Sayyiduna Abdullah Ibn Mas‘ud (Allah be pleased with him) narrates that the Prophet (Allah bless him and give him peace) cursed the one who accepted riba, the one who paid it, the witness to it, and the one who recorded it. [Abu Dawud]

Rules on Loans

Definition: A Loan means repayable financial aid. It does not refer to lending a particular article (‘ayn) for someone to use and then return after use, which is termed an ‘ariyya. [Nawawi, al-Majmu‘]

General Ruling

Loaning (meaning to give something to the borrower on the basis that he will return its equal) is recommended. [Ibid.]

The Agreement

A loan is effected through a spoken offer and acceptance, such as saying, “I loan you this,” or, “I advance it to you.” [Ibid.]

Valid Loan Contents

It is permissible to give as a personal loan any article that may be brought in advance and nothing else, though this restriction does not apply to lending for use (‘ariyya)

Stipulating a Repayment Date

It is not permissible for the lender to impose as a condition that the loan be repaid on a specific date. However, stipulating that repayment is obligatory on a specific date is valid and legally binding for the Maliki School. [Keller, Reliance of the Traveller]

Benefiting from the Loan

It is not permissible for the lender to impose some condition that will enable him to benefit from the loan, such as a condition that the borrower must return superior to what was loaned, or such as saying, “on condition that you sell me your horse for such and such an amount,” for these are usurious gain (riba). But it is permissible for the borrowers to return superior to what was loaned without this being stipulated. [Nawawi, al-Majmu‘]

Valid Conditions – Collateral and Guarantors

It is permissible for the loan agreement to include the condition of collateral (meaning for the recipient to give the lender something as collateral for what he borrows) or the condition of a guarantor, such that the recipient brings someone to guarantee that the loan will be repaid. [Ibid.]

Repayment Rules

The recipient of a loan is obliged to repay the equal of what was lent, though it is permissible for the lender to accept something other than the type of thing loaned. Suppose the lender gives the recipient a loan, meets him in another town, and asks for it back. In that case, the recipient must repay it if it is gold, silver, etc. However, if the loaned commodity was troublesome to carry, such as wheat or barley, then the recipient is not obliged to pay it back in kind but merely to pay back its value. [Ibid.]

Allah knows best.

I pray this is of benefit and that Allah guides us all.
[Shaykh] Irshaad Sedick
Checked and Approved by Shaykh Faraz Rabbani

Shaykh Irshaad Sedick was raised in South Africa in a traditional Muslim family. He graduated from Dar al-Ulum al-Arabiyyah al-Islamiyyah in Strand, Western Cape, under the guidance of the late world-renowned scholar Shaykh Taha Karaan.

Shaykh Irshaad received Ijaza from many luminaries of the Islamic world, including Shaykh Taha Karaan, Mawlana Yusuf Karaan, and Mawlana Abdul Hafeez Makki, among others.

He is the author of the text “The Musnad of Ahmad ibn Hanbal: A Hujjah or not?” He has served as the Director of the Discover Islam Centre and Al Jeem Foundation. For the last five years till present, he has served as the Khatib of Masjid Ar-Rashideen, Mowbray, Cape Town.

Shaykh Irshaad has thirteen years of teaching experience at some of the leading Islamic institutes in Cape Town). He is currently building an Islamic online learning and media platform called ‘Isnad Academy’ and has completed his Master’s degree in the study of Islam at the University of Johannesburg. He has a keen interest in healthy living and fitness.