Why Interest is Prohibited in Islam
Riba is oppressive
The Prophet Muhammad (s) warned that riba would become a major oppressive force in the world. The riba system replaced the sacred Islamic model of public order with a secular European model, which took the sovereignty of Allah and gave it to the state. Riba has since penetrated the entire economic life of Muslims around the world and has delivered Islam’s entire world to its enemies’ sharp blades.
The word Riba appears in the Holy Quran eight times, and the Quran condemns the taking or profiting from it in the strongest possible terms. In fact, riba is one of the seven deadly sins, ranking alongside murder and adultery. In addition to the fact that riba is a destructive practice, it also violates Islamic social justice.
The Qur’an clearly defines riba as “an unethical and harmful act.” It is a form of economic slavery, and it prevents the poor from prospering. It consists of money loaned out at interest without labor and risk. This type of lending is a type of oppression because it allows the rich to make money without any risk and labor. It also denies the poor the means to escape their current conditions.
It exploits those in need
Interest is an income that is not earned or deserved by the debtor. As such, Muslims consider it an exploitation. They also believe that the wealth of the rich should be used for the benefit of the poor. The accumulating of wealth in the hands of the wealthy is an injustice as it widens the class gap and restricts the circulation of wealth.
Interest is also prohibited in Islam because it exploits those who are in need. In other words, if a rich person lends a poor person money, he or she is exploiting them by charging interest. This is considered a violation of Islamic law, which encourages giving charity to those in need.
It restricts wealth circulation
In the Islamic religion, interest is forbidden in all forms. While the rule is sweeping and inflexible in theory, it is often interpreted differently in practice. The most prudent approach for practicing Muslims is to avoid interest at all costs. This is particularly difficult in the modern world, which is profit-driven and fast-paced. Moreover, Islam prohibits the hoarding of any form of money. A brief overview of the reasons why interest is prohibited in Islam will help provide some context for these issues.
There are three main sources through which unlawful wealth can accumulate. Islam prohibits these three sources, thus limiting the flow of wealth and preventing its accumulation. This may prevent the accumulation of excessive wealth, but it is still possible for intelligent people to amass wealth that disproportionately harms the less fortunate.
Muslims consider interest to be oppressive and exploitative. They believe that money should be used to help those in need. In addition, the practice of riba that guarantees a return on investment is unfair. Although Muslims would consider a guaranteed income from investment to be a fair practice, they view interest as a way to accumulate wealth among the wealthy, which increases class differences and restricts the circulation of wealth.
It restricts wealth circulation in society
The prohibition of interest is based on the assumption that the borrower bears the risk of repaying the loan. Interest is therefore an unjust practice, because the lender is unable to retain the collateral if the borrower defaults. This is contrary to the principle of the risk-reward relationship in Islam.
In Islam, interest is prohibited because it hinders the circulation of wealth within society. This means that most social ills arise from a poor distribution of national wealth. This results in some people becoming rich, while others become poor. In turn, the poor are often exploited by the rich. Interest offers a tempting opportunity for quick gains, which leads to exploitation of the poor.
In addition, interest is not based on the capital utilized. The money borrowed by the debtor is not earned or deserved, but rather comes from a fictional source. Muslims consider interest to be a form of exploitation, as it forces the debtor to take a financial risk in order to receive the money. Interest is an unfair method of income distribution, and has resulted in global financial crashes.