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Al-Ahram Weekly 11 - 17 November 1999 Issue No. 455 
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Published in Cairo by AL-AHRAM established in 1875 |
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Al-Ahram Weekly 11 - 17 November 1999 Issue No. 455
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| Published in Cairo by AL-AHRAM established in 1875 |
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Egypt Region International Economy Opinion Culture Features Profile Travel Books Sports People Time Out Chronicles Cartoons Letters Borrowing in the balance
By Mona El-Fiqi
Tantawi
Islam is known to rule out borrowing and lending if usury is involved. But Al-Azhar Rector Sheikh Mohamed Sayed Tantawi says borrowing to meet the necessities of life is permissible.
In an interview with Al-Ahram Weekly, Tantawi said, "If a Muslim is in urgent need of the money in order to acquire 'necessities,' such as food, clothing, medicine or shelter, a loan is not haram (against Islam) since he is compelled to take one out." The criteria for "necessities", according to Tantawi, vary, since it is the individual who determines his needs "according to his conscience and his social and personal circumstances."
This came after a fatwa (religious opinion) attributed to Tantawi and published in Al-Akhbar newspaper that extension of bank credit to individuals for "non-investment purposes" is religiously prohibited.
One sector which would be in real jeopardy were loans to be religiously prohibited is the real estate market, where a prime cause for its slump has been difficulties encountered by commercial banks in collecting interests on their loans and, hence, loans to this sector have been largely curtailed.
"If a Muslim needs an 'ordinary' house to live in and not a luxurious one, yet cannot afford buying it without a loan, then this would not be religiously prohibited," Tantawi told the Weekly.
But despite Tantawi's moderate stance in which he denies having categorically prohibited all personal loans, the possible implications of his reported fatwa for future laws have already triggered a reaction in parliament.
Mahmoud Ali Hassan, head of the Housing Committee in the People's Assembly, said that Tantawi's opinion as reported by Al-Akhbar might actually prevent the long-awaited mortgage draft law from being passed by parliament. The law is expected to help alleviate the state of recession in the real estate sector by providing the required funding for lower and middle-income consumers.
According to Abdallah Tayel, head of the People's Assembly's Economic Committee, the committee is reconsidering the religious legitimacy of the new mortgage draft law. A point to be grappled with here, says Tayel, is that some Islamic jurists actually do consider consumers' loans as religiously prohibited.
In order to avoid the pitfall of violating Islamic law once the new mortgage law is applied, said Tayel, a contract should be signed between the seller, the buyer and the bank. The contract should stipulate that the bank will pay the seller the total price of the housing unit, while the buyer will repay the bank in instalments. This process, according to Tayel, would guarantee that the borrower does not use the loan for other purposes.
