Quran Garden

Session 303

Chapter 2

Verse 275

a continuation

Those who devour interest will not rise but like a person possessed of the devil and demented.  That is because they say, ‘Trade is the same as usury.’ But Allah has permitted trade and He has forbidden usury. Whoever is given advice by his Lord and then desists, may keep what he received in the past and his affair is Allah’s concern. But all who return to it will be the Companions of the Fire, remaining in it timelessly, forever.

(Chapter 2: Verse 275)

             If you examine any usurious or interest-based contract, you will find it to be an invalid contract.  Why? Because a contract should be a balanced legal document that protects the rights of both parties; while the usurious transaction is unfair at its core.  It protects and guarantees the rights of one party only: the rich lender.

             Take a moment to think about this inherently despicable transaction.  The person who is poor, in need, and can barely feed his or her family is seeking a loan; yet he or she is the one burdened with guaranteeing the enrichment of the lender who is -by definition- not in need.   This injustice fosters resentment and hatred in society.  It weakens the spirit of charity and cooperation.  Imagine the feelings of the poor who toil in debt just to see their situation worsen because they have to give the wealthy more and more.  It would have been sufficient for the rich to help the poor with a good loan that requires the return of the principal amount without any addition.

             Here we should stop and answer people who falsely claim that the following verse allows interest: God says:

You who believe, do not consume usurious interest, doubled and redoubled. Be mindful of God so that you may prosper-  (3:130)

             Some people use the phrase “do not consume usurious interest, doubled and redoubled” as an excuse that they can charge interest on loans as long as it is not outrageous.  In other words, they falsely claim that lending with interests is allowed as long as it is not predatory lending.  We say to them: rather than look through the Quran to find a loop-hole in God’s teaching, why don’t you study the Quran properly?  Listen to the following verses:  God says:

O believers, fear God and forego the interest that is owed, if you really believe. And if you do not, then be warned of war from Allah and His messenger.  And if you repent, then you will have your principal, neither harming others, nor suffering harm. (2:278, 279)

             Take note that God did not allow any interest whatsoever; He directed those who repent to get back their original principal and nothing more.  Allah did not allow them to keep any increase, even a small one. 

             Other people use the contract as an excuse to deal with interest and usury.  They falsely claim that since both parties agreed on the terms of a clear contract, then the transaction is permissible.  We answer that there is a higher authority directing our affairs.  God’s teachings overrule any contract you and I may concoct together.  Take the example of an unmarried man and woman agreeing to have sexual relations.  Does their agreement overrule God’s teachings against adultery? Of course not.  A contract where both parties agree is only valid on matters that do not contradict heavenly teachings.  Another main requirement of a contract is that the agreement does not cause harm to the society at large.  A contract that involves usury and interest violates both conditions. 

             Let’s look into a practical example from everyday life.  There are two adjacent stores in a market.  The owner of the first store has a thousand dollars.  He buys good quality merchandise to sell in the store.  He will need to earn enough money to make a living and keep the store running.  The owner of the second store is poor.  He does not have any capital to work with, so he borrows a thousand dollars to buy merchandise.  The loan contract stipulates that he has to return the original thousand dollars plus $100 in interest after six months.  This man also needs to earn enough money to make a living and keep the business running.  So where would the $100 of interest come from? If the 2^nd merchant tries to sell his goods at a higher price than the first one, no one will buy from him.  If he sells the goods at a lower price, he would barely make a living, would not be able to pay back the loan, or stay in poverty forever.  Most likely, and in order to make a living, run the business, and pay back the interest on the loan, the 2^nd merchant would have to get lower quality goods and sell them at a price similar to the better goods.  He or she would have to trick the customer into buying these goods.  Thus, the society in general would suffer.  In effect, the society has to pay the price for the usurious loan. 

             Allah is the creator and the provider.  He wants to foster the spirit of cooperation and charity in society.  If Allah blessed you with more than you need, make sure to share some and help others.  When the rich pay the prescribed alms –Zakat-, and come to the aid of those who fell on hard times, the entire society is lifted.  A poor man would pray to God to increase the wealth of the wealthy because he knows that he would get a share from it too.  Contrast that to a poor man who feels that the entire world is against him exploiting his weakness and need.  What kind of prayer would he ask God for?