THE DANGERS OF (RIBA) USURY
“O you who have believed, do not consume usury, doubled and multiplied, but fear Allah that you may be successful.” Qur’an 3:130
Introduction
Is it not amazing that a Muslim will never eat pork because it is haram (unlawful); never marry his mother or sister because it is also haram, yet that same person has no problem devouring riba (e.g. usury)? Did you know that engaging in riba (usury) is a major sin which could lead you to Hell?
“...but whoever returns (to dealing in riba), such are the dwellers of the Fire — they will abide therein.” Qur’an 2:275
If dealing in riba (usury) is so punishable, why do many Muslims fall into this sin and take the issue so lightly?
The Meaning Of Riba (Usury)
Rriba is an Arabic noun derived from the verb Raba, meaning ‘to increase’, ‘to grow’, and ‘to exceed’. It includes interest which is paid by banks or on loans such as car loans, home loans or credit card debt.
Proof That Riba Is Haram
There are many proofs showing that riba is haram and one of the most serious sins in Islam!
For those with true faith in Allah and the Qur’an, this clear verse prohibiting riba is sufficient:
“…Allah has permitted trade and has forbidden riba.” Qur’an 2:275
In the Qur’an, Allah does not declare war on anyone except those who deal in riba:
“O you who believe, fear Allah and give up what remains of your demand for riba, if you are indeed believers. If you do it not, take notice of war from Allah and His Messenger.” Qur’an 2:278-279
Would you like Allah, The Almighty, to wage war against you after He has made it abundantly clear that riba is haram?
The Prophet (peace be upon him) warned that consuming riba is one of the seven sins that doom a person to Hell. (Bukhari and Muslim)
Riba (Usury) is haram in all of its aspects, as the Prophet (peace be upon him) said (Muslim),
“Allah has cursed the one who consumes riba, the one who gives it, the one who witnesses over it, and the one who writes down the transaction.”
Do not be of those whom Allah has cursed!
Why Is Riba (Usury) Haram?
The first and foremost reason riba (usury) is haram is because Allah declared it so. It is based on Allah’s infinite wisdom that He deems an action to be obligatory or prohibited, prescribing matters in man’s best interests, in this life and in the Hereafter, as He is the All-Wise, All-Knowing. The scholars of Islam have suggested the following reasons as to why riba is haram:
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Whole nations, dozens of them, large and small, have foreign debts so large that their riba payments on these debts are a crushing burden on the entire country. Debt kills. Some 11 million children die each year around the world due to conditions of poverty and debt. Former President Obasanjo, commented on the debt Nigeria faces:
“All that we had borrowed up to 1985 or 1986 was around $5 billion and we have paid about $16 billion yet we are still being told that we owe about $28 billion. That $28 billion came about because of the injustice in the foreign creditors’ (lenders) interest rates. If you ask me what is the worst thing in the world, I will say it is compound interest.”
- Jubilee 2000 news update, August 2000
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Riba conflicts with the spirit of brotherhood and sympathy, and is based on greed, selfishness and hard heartedness.
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Riba is one of the major contributors towards inflation.
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Riba causes trauma and depression due to mounting debts.
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Riba is a sure gain without any possibility of loss, hence all the risk is taken by the borrower, rather than sharing the risk and the profits with both parties.
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Riba creates a monopoly in society, where the rich are rewarded for being wealthy, while those who are not are forced to pay extra!
During the global financial crisis in 2008 and 2009, the Daily Vatican newspaper, L’Osservatore Romano, reported the Vatican as saying that the Islamic finance system may help Western banks in the crisis as an alternative. The Vatican advised: “The ethical principles on which Islamic finance is based may bring banks closer to their clients and to the true spirit which should mark every financial service.”
Where a riba-based market fails, Islamic financial institutions do not suffer the same consequences since the risk is shared by both parties. Lenders will be more careful, as they also share the risk of losing money if the borrower cannot pay back the original sum.
Given all the problems that riba creates, it is no wonder Islam prohibits such a detestable act.
How Can I Avoid Riba (Usury)?
Living in a capitalist society makes it difficult to completely avoid riba. However, this should not be used as an excuse to freely indulge in it. An obvious way to steer clear of this evil is to not take out a loan which involves paying riba. Other solutions include:
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Opening up riba-free bank accounts.
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Not entering into contracts which stipulate riba penalties, even though one intends to pay on time.
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Making bill payments on time so as not incur a late penalty.
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Meeting any conditions required to continue trading without the use of riba.
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Borrowing money from family or friends where possible.
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Dealing with Islamically compliant banks.
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Renting if you cannot afford to buy a house without riba.
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Accepting/organising a “goodly loan” (al-qard al-hasanah), which is a loan by means of which one intends to show kindness to another, which does not involve taking riba.