How to dispose of interest funds
| Fatwa #2138 | Category: Business & Trade | Country: Zambia | Date: 15th July 2026 |
| Fatwa #2138 | Date: 15th July 2026 |
| Category: Business & Trade | |
| Country: Zambia | |
Question
ٱلسَّلَامُ عَلَيْكُمْ وَرَحْمَةُ ٱللهِ وَبَرَكَاتُهُ
Hope Mufti Saheb keeping well.
Wanted a bit of clarity on where interest money can be utilised as I would like to utilise it to pay fees for a Zakaatable recipients for a certain institution.
Answer
In the Name of Allah, the Most Gracious, the Most Merciful.
As-salāmu ‘alaykum wa-rahmatullāhi wa-barakātuh.
Interest funds which cannot be given back to the original owners must be disposed off by giving it away to a poor person.[1] It is not necessary for this recipient to be Muslim, however, it is necessary that the recipient falls under the definition of poor i.e. owns less than the nisaab amount.
It is not permissible to derive any benefit from interest funds. Therefore, interest funds should not be given towards public projects as firstly, it is possible one may derive benefit from the public project once completed e.g. a road or toilets, and secondly, one would not have made anyone the new owner of said funds.
Since interest can be given to the poor, it can also be used to pay the fees of a poor student who has pending fees at an institution.
It should be noted that once interest is disposed off to the needy, it becomes Halal for the needy person to use as he wishes.
And Allah Ta’āla Knows Best
Mufti Bilal Pandor
Concurred by
Mufti Muhammad Patel
Darul Iftaa Mahmudiyyah
Lusaka, Zambia
[1] https://daruliftaazambia.com/fatwa/?id=1386