The vice president of the Salafi Dawah group, Yasser Borhamy, said Sunday the interest on the loan Egypt is set to receive from the International Monetary Fund does not involve usury, a practice prohibited in Islam.
In a fatwa he made that was published on Sawt al-Salaf website, Borhamy said that since the interest on the loan is only 1.1 percent, paid in the form of administrative fees, the loan could be considered a grant.
Usurious loans have higher interest rates that reach up to 20 percent, he said.
Borhamy said that in modern times, loans given to countres “are handled by huge financial institutions that examine the conditions of the borrowing country, its needs to reform the economy, its ability to pay off the loan and the time frame it needs for that, as well as the degree of corruption there.”
He added that if one such institution gave the country a loan at an interest rate of 2 percent, then this is not considered usury.
Borhamy called for studying the conditions for the loan from an economic perspective and assessing whether it achieves the interests of the country, adding that such actions were the role of the government and the president in the absence of Parliament.
Yousry Hammad, spokesperson for the Salafi Nour Party, had previously said the interests on the IMF loan are not prohibited because they are administrative fees, and added that people should not issue uninformed fatwas.
However, other Salafis had disagreed in the past. Nour Party supreme committee member Younis Makhyoun had previous said that borrowing from the IMF or any foreign source would be considered “usury.”
“God will never bless an economy based on usury,” said Makhyoun, calling on the government to find other sources of funding.
Salafi members of the now-defunct Parliament had rejected the loan in May, saying that the interest rates qualified as usury.