Question: I have been confused on the issue of Mosques collecting interest money for distribution. Many people believe this money can be collected and donated for the use of toilets in a public place, but I have always been under the impression that this money is filthy and should be destroyed or buried. Is it permissible to collect interest money in the Mosque?
Answer: In the Name of Allah, Most Compassionate, Most Merciful,
Interest transactions are totally Haram (unlawful) and thus whosoever deals with interest money in any way or form will be sinful. There are grave warnings promised in the Qur'an and Sunnah for the one who deals with interest.
Giving and taking interest are both decisively impressible in Islam. Similarly, it is impressible to consume unlawfully-earned money.
The ruling in the Hanafi School with regards to Haram and wrongly-acquired money is that the money must be returned to its owner(s). If it is not possible to return it to its owners, such as bank Interest, then one must give it away to the poor with the intention of removing the burden and getting rid of this unlawful filthy money (See Radd al-Muhtar, al-Fatawa al-Hindiyya and Ahsan al-Fatawa).
Therefore, if the collection of interest money in the Masjid is distributed on poor people, then this is permissible, otherwise impermissible.
It should also be remembered here that, this ruling is in the situation when one already has interest money in their ownership. To actually open an interest bearing account for the purpose of distributing it on poor people, and publicizing it, is unlawful.
Question.) I have been accepted in a beneficial program for a Masters in Education. The problem is that I received only a small scholarship and the rest of my financial aid package consisted of loans (interest based). My parents are strongly encouraging me to attend the program. They say that in this society (America), it is impossible to finance one's education without such loans. Unfortunately, there are few Muslim scholarships (but I am trying to apply for them).
To not accept the loan would mean not attending the program, and not achieving a noble end, i.e. to help the Muslim ummah. However, the ends do not justify the means. We went to an imam, and he cited the fatwa that in dar al-harb it is permissible. I went through some of your previous fiqh questions, and I noted that some of what the Imam said was misconstrued; that this is a minority opinion and that most ulama of the Hanafi madhab do not follow this opinion. I am confused now, because I know not to attend the program (because of the loans) would greatly upset my parents, which upsets me. However, to do so, to me seems tantamount to displeasing Allah azza wa jaal, which is more upsetting. Please advise me in this urgent matter as soon as possible. Jazakum Allahu Khair
Answer.) Your first and foremost duty lies in the pleasure of Allah. If pleasing your parents is tantamount to the displeasure of Allah, you will be sinful. Allah has decreed interest to be haram.
No matter what we are deceptively led to believe as far as the 'compulsion of taking such loans', etc. interest is haram and we are required to abstain. You can apply for a non-interest bearing loan or a scholarship from a charitable foundation.
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