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Islam provides guidance about moral, spiritual, social, and
economic aspects of daily life. In an Islamic society material well-being of
its members is considered as important as their spiritual development. The
pre-Islamic Arab society had developed major economic ills in addition to corruption
in other spheres of life. The Makkan society was evolving into a tribal
capitalistic economy. The rich exploited the poor and the weak, especially by
means of Riba or usury. Riba is any excess on the capital that has been
extended as a loan to someone in need.
In this way, the lender is able to exploit the borrower who becomes poorer and poorer. The essence of Usury was that it was certain and that whether the borrower gained or lost, the usurer took his "pound of flesh". The same was the situation at Madinah. Islam put a ban on this kind of financial system and provided comprehensive and effective alternatives. The Prophet (ï·º) received many revelations against Riba and these revelations condemned it in a number of ways. The Quran asked the believers to abandon usury:
"O you who believe! Devour not usury doubled and multiplied and fear God so that you may prosper". (3:130).
This means that the real means of getting prosperous and
rich is the fear of God which guides us to take care of His creatures and
servants. The Quranic verses ensure severe punishment for those who practice
usury by saying:
"Allah will deprive usury of all blessings but will give increase for deeds of charity; for He loves not ungrateful and wicked". (2:276).
This means that taking usury is a form of wickedness and thanklessness towards Allah and both acts are fully disliked by Him. He loves simplicity and thankfulness. He loves those who spend in His way without charging any extra money or even without an expected reward except for the blessing of Allah. As opposed to usury, Allah has fully permitted legitimate trade, which promotes a healthy economy. The Quran says:
"... but Allah has permitted trade and forbidden usury... ... ..." (2:275).
Legitimate trade or commerce increases the prosperity of men
and nations while dependence on usury would just breed and encourage a race of
idlers, cruel blood-suckers, and worthless fellows who do not know their own
good. The lofty aim and ultimate goal of Islamic society are to ensure the healthy
and just circulation of wealth and discourage the concentration of wealth in a few
hands. The Quran says:
"...so that this (wealth) may not circulate solely among the wealthy among you..." (59:7).
This implies that Islam does not encourage the concentration
of wealth in selected hands because it is bound to lead to several social evils
and crimes arising from undue disparity and increasing frustration among the
deprived. For these reasons the Quran states usury as a war against God and His
Messenger:
"If you do not give up (usury) then be warned of war against God and His Messenger.. " (2:279).
The major reason for condemning Riba is the fact that it is
a way of making money without any degree of hard work. Islam, on the other
hand, encourages its followers to make an actual effort for earning in the
light of this Hadith:
"One who works for himself is a friend of God."
The Prophet (ï·º) not only condemned Riba but also took practical steps to abolish this cursed and cruel practice. When he signed the treaty with the Christians of Najran, he added a special clause that stated that if the people of Najran indulged in Riba the treaty would stand null and void and the Muslims would feel compelled to wage a war against them. The Banu Mughirah in Arabia was notorious for charging usury. After the Conquest of Makkah, he abolished all their usury and ensured that they would not practice this in the future. The Prophet's uncle Abbas was a big moneylender and usurer. In his farewell sermon, the Holy Prophet (ï·º) declared,
“All interests on loans taken during the Age of Ignorance stand abolished and I abolish all interest on the loans advanced by my uncle Abbas".
