Riba

"The Arabic word riba linguistically means “an addition to, or an increase of, a thing over and above its original size or amount.” In the Qur’an, the term riba signifies an unlawful and forced addition to the payback value of money or goods lent from one person to another."


I'm not gonna discuss about this whole thing in detail coz i lacked the knowledge on this issue. Nevertheless, it's an interesting issue to be discussed without going deeper among those who are not that familiar with economics and business. But i do have an interest to talk about this whole stuff in more detail with someone who has knowledge on this matter. I find it easier to grasp an idea if you talk face to face with a person rather than reading it from the net and slowly fall asleep zZZzz...

So Islam says that adding interest to a loan is wrong. That's understandable. I lend you RM 200 but asked you to pay me back RM 250. You as the borrower would demand why do you need to pay RM 50 extra? Logically me the lender, would give the reason that the RM 50 extra works as some kind of profit for me since i lend you the money. That RM 50 extra is the effort i put to lend you the money. I guess that's how money lending business work. If not how will they survive?

So initially i thought the interest were justifiable. But i soon realized it's actually unfair and it's an extra burden. But there's no point bitching bout the interest imposed since you took up the loan and you agreed to it. Yeah, we are forced to follow such system.

There is no money lending business that doesn't impose interest. Actually there is, when you borrow money from friends and family. You borrow RM 500 from them and promised to pay them back the RM 500 and they never ask any interest in addition to the money they lend you. Yet, despite not imposing interest, people still don't pay up money borrowed from friends and family. Hell, there's no additional charges when you fail to pay on time too! Had you, as a lender, made a contract, the borrower will be in deep shit.

So imposing interest is wrong, what about imposing reasonable penalty interest for LATE PAYMENT? I think it's justifiable because that person didn't pay on time! Islam definitely teach you to KEEP YOUR PROMISE and keeping a promise means PAYING ON TIME. Again, the penalty must be REASONABLE. Do you know how much loss you caused to the person who you borrowed money from by not paying on time?

And i would think giving security for the money you are going to borrow is ok. The purpose of the security is to ensure that you actually pay back and if you don't pay back, you can kiss that security goodbye.