Earning Interest On Contributions For Later Interest Payment
For something to be categorized as interest, it needs to be a loan arrangement and lender must demand profit on loan. Merely presence of a fixed return doesn’t necessarily make it interest. Financing arrangements/Investments may also included fixed amount of return. Therefore, the distinguishing factor here is the presence/absence of a loan arrangement. If the organization is taking loan from the subscribers and lenders are demanding profit on that loan, then this is interest. And as far as interest it concerned, its consumption is prohibited in Islam but there is no prohibition for somone who is paying it. One can make a query in this regard from the relevant organization and rely on the face value of their statement. Therefore, if the first scheme fulfills the criteria of being called interest then it cannot be consumed however, payment can be made in the second scheme. The former interest cannot be consumed to fulfil the needs of the latter interest payment. Please see regarding payment of Interest : Discussion 72050 __ Please also refer to the video below from 39:28 to 41:11 regarding determination of a loan arrangement or a financing arrangement https://youtu.be/7JhVyMB_Q3A?si=K8IY74Mt-XFITxo1&t=2368