Abdullah Saeed

The prohibition of riba (interest) in Islam has been a hotly discussed issue among contemporary Muslims since the 1960s. Since riba is perceived by a considerable number of Muslims to be bank interest, and almost all banking systems in the world, including those of the Muslim world, are based on interest, many Muslims are concerned whether it is lawful. For those who regard bank interest as riba, any increase in a loan transaction over and above the principal is riba because it involves an increase over and above the principal. They contend that the fiqhi interpretation of riba is the interpretation and must be followed.

For other Muslims, the prohibition of riba is related closely to the “exploitation” of the needy and poor by the relatively well-off, an element that, for them, may or may not exist in modern bank interest. These Muslims have argued that the fiqhi interpretation given to riba is inadequate and does not take into consideration the moral emphasis associated with the prohibition. This paper looks at a) the overall context of the Qur’anic prohibition of riba; b) how the term is used in the Qur’an, the Sunnah, and in the fiqhi literature; and c) the lack of moral emphasis in the current debate.

Riba and the Qur’an: The Context of Prohibition

The Qur’an’s condemnation and ultimate prohibition of riba was preceded by its condemnation of several other morally unacceptable forms of behavior toward the socially and economically weaker strata of the Makkan community. From the very beginning of the Prophet’s mission, Qur’anic verses encouraged Makkans to help, inter alia, the poor, the needy, and the orphans and said that those who do not perform their prayers or feed the destitute will enter Hell (74:43-44). In other earlier verses, the Qur’an stated that the beggar and the destitute have a “known and definite right” to a share of the wealth of the rich (70:24-25) and criticized the unbelievers who “do not encourage giving food to the destitute” (69:34). Rich Makkans were condemned severely in other early verses, such as 89: 17-20:

• Nay, but [0 people, consider all that you do and fail to do:] you are not generous towards the orphan, and you do not urge one another to feed the needy, and you devour the inheritance [of others’] with devouring greed and you love wealth with endless love.

The Qur’an also used stories and parables to demonstrate the negative consequences of preventing the poor from having a share of the wealth of the rich.

It is in this context that the Qur’an repeatedly encourages and urges Muslims to spend out of their wealth. Terms denoting “spending,” whose root in Arabic is n-f-q, are mentioned in the Qur’an about seventy-five times.’ Others, like sadaqah, were used twelve times: while zakah, in the meaning of sadaqah or spending, is used thirty-one times. In all but four instances, zakah is mentioned along with the command to perform the prayer (salah ) emphasizing the importance of spending. In Qur’anic terminology, it appears that sadaqah and zakah are synonymous, even though Islamic law later differentiated between them by restricting the former to voluntary spending and the latter to compulsory spending: This early emphasis on spending indicates that, apart from the insistence on God‘s unity (tawhid), His favors to His creatures, the prophethood of Muhammad, the Qur’an, and life after death, the fundamental issue of concern was the well-being of the weaker strata of the community and the duty of the rich to look after the economically disadvantaged members of the community.’ In many verses, the rich are commanded to care for the disadvantaged and to spend for the sake of God, on one’s relatives (8:41), orphans (2:177,220; 8:41; 76:s-9), debtors (9:60), wayfarers (2:177; 8:41; 9:60), migrants (24:22), prisoners of war (763-9), the divorced (2:236), beggars, the deprived (51:19; 70:19-25), the destitute (8:41; 76:s-9), the poor (2:271; 9:60), and to free slaves (2:177; 9:60; 58:3).

The rich are reminded that their wealth is given by God as a trust, and that amassing it without regard for the needy in the community will not lead to success either in this world or in the hereafter. The Qur’an says that wealth alone does not bring one closer to God (34:37). It condemns severely any pride that one may take in it (“God does not like the haughty;” 57:24) and reminds the rich that God has destroyed many rich people, like Q- (28:81), for their haughtiness and lack of concern for the poor and the needy (17:16; 2354; 28:58). One of the reasons that wealth is given to people is to test them (2:155; 3:186; 8:28). Miserliness is also condemned severely (57:24), and those who overcome their miserliness attain salvation (595; 64:15-16).

Spending is made obligatory via zakat, while other forms of voluntary spending are highly encouraged. Those who hoard gold and silver, the two most important forms of money at the time of the Prophet, and do not spend in the way of God are promised a severe punishment:

• But as for all who lay up treasures of gold and silver and do not spend them for the sake of God, give them tidings of grievous suffering [in the life to come]: on the Day when that [hoarded wealth] shall be heated in the fire of hell and their foreheads and their sides and their backs branded therewith. (9:35)

The Qur’an, in 35:29, argues that spending is a trade without loss:

• They who [truly] follow God’s revelation and are constant in prayer and spend on others, secretly and openly, out of what We provide for them as sustenance, it is they who may look forward to a bargain that can never fail.

According to the Qur’an, spending is a form of jihad (8:72; 49:15). Among the most important qualities of a Muslim is spending out of one’s God-given wealth (42:38). It is a way to salvation (63:lO). To attain God’s pleasure, one should spend from that which he/she loves (3:92). It should be for the sake of God, no verbal harm should be inflicted upon the receiver (2:262-63), given with no intent to show off (2:264; 4:38) and in a moderate manner (6: 141; 7:3 1). According to the Qur’an, “spendthrifts are brothers of Satan” (17:26-27). Those who spend will receive an enormous reward after death: “Whatever you spend will be awaiting” in the hereafter (34:39) and will be rewarded by God (2:261,265; 57:7).

If it is difficult to give a grant, one is encouraged to make a loan (qard hasan; 2:245). Such loans are for the sake of God, not to enrich the wealthy by allowing them to take riba. The context of all the Qur’anic verses where this term appears indicates that its recipients are the needy and the poor:

• And why should you not spend freely in the cause of God, seeing that God‘s [alone] is the heritage of the heavens and the earth? . . . Who is it that will offer up unto God a qard hasan, which He will amply repay? (57:10-11)

If the debtor is experiencing difficulties when the time for repayment arrives, he/she should be given more time without the imposition of additional financial burdens: “It is better if you give (even the principal) as charity” (2:280).

All of the above indicate the Qur’an’s overall concern with the economically disadvantaged and with the need to provide the required assistance to them without undue hardship, either by giving them a grant or, if that is difficult, a qard hasan. It does not indicate, however, that this latter form of assistance is made for purposes of trade or commerce (e.g., non humanitarian purposes).

• click for a full paper in pdf