What is the Islamic legal ruling on state funding for unemployed youth, if part of it (30%) is financed by the Youth Employment Fund and is repaid without interest, and the other part (70%) is financed by the State Bank and is repaid with a 4% interest rate?
There is no objection to investing through the first type of financing because it is a benevolent loan (qard hasan). As for the second type, it is a usurious loan, forbidden, regardless of the size of the usurious interest. Every loan that draws a benefit is prohibited, and because it is a contract of aid and proximity (qurbah), if an increase is stipulated therein, it takes it out of its intended purpose. If you can participate in the first type without the second, then there is no harm. However, if that is conditioned upon your participation in the second type, then participation is forbidden.
Summarized from the full answer at Ftawy · reviewed Sep 2, 2026
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