Aaron in Azerbaijan

Just another blog about Azerbaijan.

Offending the Gods, Again

with one comment

I don’t need to tell you that there are conflicts and disputes within any given religion.  You know that.  However, sometimes it is interesting to take a look at specific examples of such conflicts.  It turns out that finance is actually an area of hot dispute when it comes to making loans in the Muslim world.  It turns out that Muslims are of a similar mind to Jews when it comes to interest and usury.  There is a large contingent of folks who happen to believe that the Qu’ran forbids usury, the practice of loaning money with interest.  It looks like the primary-source evidence is on their side (forgive me that this is a translation of the Qu’ranic writings):

Fourth Revelation (Surah al-Baqarah, verses 275-81)

Those who benefit from riba shall be raised like those who have been driven to madness by the touch of the Devil; this is because they say: “Trade is like riba” while God has permitted trade and forbidden riba. Hence those who have received the admonition from their Lord and desist, may have what has already passed, their case being entrusted to God; but those who revert shall be the inhabitants of the fire and abide therein for ever. (275).

And there are a few other verses you can find that prohibit riba, the word for interest or usury.  I’m in the curious position, though, of being part of organizations that lend in a Muslim society.  First, the credit union, and now AccessBank.  Which also means that I get to ask people who are running these lending organizations why lending money with interest is okay here.  I’ve gotten two explanations.  The first is from my branch manager here in Lənkəran:

When we give credit, the important thing is that we do not charge too much interest.  Instead, we should charge interest that serves to cover our costs and then a little more.  More than that is haram. Also, when someone is selling a product, if in wholesale they buy for 1 Manat, they should not sell it retail for more than 2 Manat. If they more than double the price, that should be Haraam.

That’s an interesting take on things.  There’s also the head of the credit union association here who has weighed in on the subject:

Many Muslims believe that interest is forbidden by the Qu’ran.  However, with credit unions, as opposed to banks, the interest money goes back into making more loans.  Since the interest is not going into profit, it is not haram.

So there you are.  It sounds like the reality of the modern Western banking practices are edging out interpretations of the Qu’ran, as well as the other holy books.


Written by Aaron

May 12, 2010 at 5:49 pm

Posted in Uncategorized

One Response

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  1. […] already had a brief intro to an Islamic banking feature, regarding riba, interest.  And that is the principle that governs most of what we know of as Islamic banking.  […]

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