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Why Usury Is Prohibited. by Taamas111 (m): 5:05pm on January 13
Rufai Oladimeji
Lagos State University
100Level, Nigeria.

Why mark up (usury) is prohibited in
Islam? Does interest has an effect on
the national economy?

All perfect praise be to Allah, The Lord of the
Worlds. I testify that there is none worthy of
worship except Allah, and that Muhammad
is His slave and Messenger.

Imaam ar-Raazi and other Muslim scholars
state five reasons for forbidding Riba:

First, in Riba transactions a person takes the
money of another without compensation
because the person who pays a Dirham in
return for two Dirhams in cash or after a
while gets an increase in his money without
giving something for it. It is known that
money is the key to getting what we need.
So, it has to be protected. The Prophet
(Sallallaahu Alaihi wa Sallam) said: "The
inviolability of the money of the person is
similar to the inviolability of his blood."
So, taking his money without compensation
is forbidden.

Second, some scholars state that Allah
forbade Riba as it discourages people from
working. In fact, when the money owner
could get profit and interest through Riba
transactions without having to work, he
becomes lazy and prefers Riba to investing in
trade and industry and this in turn leads to
joblessness among the people. Indeed, the
public interest is in trade, crafts, factories
and buildings.

Third, Riba causes severing relations among
people as it takes the place of good loans
which promote kindness and courtesy among

Fourth, most of the time it is the rich
person who gives the Riba loan to the poor
person, hence putting yet another burden on
the latter. So, encouraging Riba means giving
more power to the rich over the poor who,
in addition, will have to pay more than what
he took and this is contradictory to mercy
and benevolence and Allah is the most
Merciful, the most Benevolent.

Fifth, Riba is forbidden by evidence from the
texts of the Quran and Sunnah and we are
not asked to know its wisdom. We are only
required to approve that Riba is forbidden
and act accordingly. In fact, a Muslim duty is
to surrender to the Divine Instructions, to
adhere to them and to do what is Halaal and
to avoid what is Haraam, since Islam is
based on total submission to Allah, The
Exalted, whether or not one knows the
wisdom or reason behind the Divine
Allah says (what means): {It is not for a
believer, man or woman, when Allah and
His Messenger have decreed a matter
that they should have any option in their
decision. And whoever disobeys Allah and
His Messenger, he has indeed strayed in a
plain error.} [Quran 33:36]

The Prophet said: “Allah has cursed
the one who consumes Riba (i.e. usury or
interest), the one who gives it to others,
the one who records it and the one who
witnesses it.” [Muslim]
As regards the effect of Riba (interest) on the
national economy, it has dangerous effects
and bad consequences on the economy. This
is one of the reasons why Allah forbade it.
We will limit ourselves here to two disastrous
effects of Riba on the national economies
both in the consumption level and the
production one.
First, the Riba loans add to the exploitation
of the poor and the needy as it results in
more poverty, hence reducing their future

On the other hand, these Riba loans make
the rich creditors richer and add to their
future earnings. It is known that the poor
and needy classes constitute a big majority
of the society. And, in case the income of
this category of people decreases then their
demand on the consumed and invested
commodities decreases as well. So, if we
know that this demand is actually the magic
key that turns the wheel of the national
economy, as a whole, we realize how big the
extent of the economical problem will be and
how expensive it is for the individual as well
as the society in general.

Second, in the field of investment and
production, the Riba banking system allows
the outflow of currencies to the wealthy
people who are able to pay the loans while
the poor ones bear the expenses as the
prices of commodities rise up and this
results also in national economy inflation
which is disastrous for any economy.
Finally, know that Allah never forbade
anything except it has some harmful effects.
Allah Knows best.


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