A file photo of Bank Al-Maghrib

By Abdul Hafez Al-Seretti, IOL Correspondent

RABAT, September 29 (IslamOnline.net) – Under the slogan “Necessity relax prohibitions”, thousands of low-income Moroccan families opt for un-Islamic interest-based loans to overcome pressing financial problems.

With the number of loan-seekers increasing day in and day out over the past decade, Moroccan citizens insist they are left with no other option but to seek interest-based loans to fulfill their daily needs.

“There was no other solution. We all know bank loans are controversial and even risky issue as we repay the loan doubled due to high interest rates,” said Ismail, a Moroccan citizen.

“It is forbidden but our limited incomes and pressing needs force us that way,” he added.

Other Moroccan citizens cited similar reasons.

“Our monthly salary hits over 1,000 dollars, however, we could not buy a house over the past ten years, not to mention paying the monthly rent which reaches in big cities around 200 dollars per month,” Munir, another Moroccan, told IOL.

He said he found no other way but to seek interest-based loans to buy a house.

Interest is banned under the Islamic banking system, as the religion forbids usury and interest-based loans are considered a sort of usury.

Haram

Muslim scholars, for their part, said seeking interest-based loans is haram (forbidden), even under special, pressing circumstances.

“Necessity is judged by Shari’ah, not by what people think. It is completely different from the western concept. Islam says what is desired is not a necessity,” Islamic Jurisprudence professor Mohamed Al-Rocky told IslamOnline.net.

“Instead of talking about necessities and resorting to bank interest-based loans, people have to look for other alternative solutions.”

Professor of Shari’ah Objectives at Mohammed V Univ., Dr. Ahmed Al-Raysoni, for his part, said the stand of Islam on the interest-based loans is known and clear-cut.

“When somebody goes sick and finds no one to help, then he can seek interest-based loans to pay for treatment. But what for people to seek loans to have more luxurious life could not be considered a necessity. The Islamic stance of usury is clear-cut.”

Poor Living Conditions

For his part, economic analyst Omar Al-Kattani said the poor living conditions of Moroccans compared to other countries make the main reason behind seeking interest-based loans.

“Economic stagnation and poverty among one fifth of the population are the main reasons that push people to seek loans,” he said.

“This is clearly manifested in the increasing rate of consumption loans over the production loans by 10%.”

Kattani said the Moroccan citizens might be obliged in some cases, especially there are no Islamic or non-usury banks in the country.

The Justice and Development Party had urged the Moroccan parliament in 1998 to enact a law allowing the establishment of non-usury and Islamic banks in the country but since then, no step was taken in this regard.

Increase

A recent report of Bank Al-Maghrib said that the rate of interest-based loans has remarkably risen in 2003 to hit around 3,231 billion dirham by an increase of 9.7% compared to 2002 and 5.3% to 2001.

Due to poor living conditions and inability of most loan seekers to pay off,  financing firms file lawsuits against the debtors.

More than 70% of the monthly salaries of Moroccan employees who have sought loans, are taken by the banks to pay off their loans premiums.

To control the process of granting loans, the Moroccan government is preparing a draft law to determine the salary percentage to be cut before deciding on giving the loans.

“To protect the citizens, a draft law is under consideration to define a certain percentage of the salaries by which the financial institutions can not give loans if the volume of the loan premiums overstepped this percentage,” said Dr. Hamza Al-Husseini.