Governments taking loans with Ribaa
4-9-2007 | IslamWeb
Question:
assalam aliakum wa rehmatuallahi wa barakatahu The World Bank and similar organizations give developing countries loans to supposedly start off their economy. The country which accepts the loans has to return it with a certain amount of interest added. The government which takes the loan is supposed to distribute the money in various fields so as to jump start the economy. Thus many come in contact with the money. Returning the amount due falls on the population of the country as they contribute in various ways to paying off the interest as well as the original amount of the loan. I want to know that will those who live in the country who do not have any say (and in most cases oppressed) whatsoever as regards to taking loans will they be punished for their involvement in the repayment of interest or will the punishment lie with the ruler who takes it. Bearing in mind that no one would be burdened with the sin of others. JazakAllah
Answer:
All perfect praise be to Allaah, The Lord of the Worlds. I testify that there is none worthy of worship except Allaah, and that Muhammad 
is His slave and Messenger.
Taking loans with interest (Ribaa) is among the major grave sins, whether the borrower is a government or someone else. The one who borrows such loans bears the sin of his action, and any one who supports him or involves in that act also bears a portion of the sin for his assistance which is prohibited by Allaah. Allaah Says (what means): {Help you one another in virtue, righteousness and piety but do not help one another in sin and transgression.}[Quran 5:2].
Therefore, the government and whoever supported it will bear the sin. On the other hand, a citizen or a resident who does not support the government in taking such loans and is not content with such action will not bear any sin whether he is an employee in the government or not, since he neither supported nor took part in that and was not pleased with it.
Allaah Knows best.