How can we avoid Riba?
Former president Obasanjo, commented on the debt Nigeria faces:
"All that we had borrowed up to 1985 or 1986 was around $5 billion and we have paid about $16 billion. Yet we are still being told that we owe about $28 billion. That $28 billion came about because of the injustice in the foreign creditors' (lenders) interest rates. If you ask me what is the worst thing in the world, I will say it is compound interest."
-Jubilee 2000 News Update, August 2000
Isn't it strange how a Muslim will strictly stay away from eating pork because it is haram, yet the same person has no problem devouring riba (otherwise known as usury or interest)?
"…but whoever returns (to dealing in Riba), such are the dwellers of the Fire- they will abide therein". (Surah Baqarah, verse 275).
Riba brings hardship into this life, but much more importantly and frighteningly are its consequences in the grave and akhirah (the Hereafter).
So how can we avoid Riba?
Living in a Western, riba-based or at the very least riba-involved society, makes it a bit more difficult, however this should not and cannot be used as an excuse to freely indulge in it. Some tips are:
- Having tawakkul that Allah will provide for you and your family
- Not taking out loans which incur interest
- Choosing halal investments (for example gold rather than the stock market)
- Renting and saving the cash for a home instead of a mortgage
- Being wary of contracts you sign and having a student of knowledge/imam/shaykh check them
- Opening up bank accounts without interest (in other words, chequing accounts)
- Making bill payments on time so as not to incur a late penalty (set your account to automatic payment so the bank will automatically withdraw and you will be sure to not pay late)
- Borrowing money from family or friends where possible
- Not buying what you simply don't have the money for – live within your means
- Dealing with Islamically compliant banks
- Accepting/Organizing a "Goodly Loan" (al Qard al Hasanah), which is a loan by means of which one intends to show kindness to another, which does not involve taking Riba
- Taking a gap year before university to save up and avoid interest loans, and/or doing a co-op/working during university
If you have received interest, you should spend it in the way of charity without expecting reward.
The most effective way to avoid Riba and to determine which transactions are permissible is by consulting Islamic scholars and utilizing their knowledge.
There is a common misconception amongst Muslims with regard to buying a first house using Riba. Some claim that it is permissible, a "necessity". The fact that one can easily rent a house instead of buying disproves this claim. Shelter is a necessity, and renting is the solution if you cannot afford to buy a house yourself at the moment. Paying rent is not "wasted money". Allah Subhanahu wa Ta'ala the most Appreciative and you will be rewarded for your obedience and patience bi'ithnillah. "When someone spends on his family seeking his reward for it from Allah, it is counted as a charity for him."(Bukhari and Muslim)
Success in this Life and the hereafter
When examining the issues of riba, we should remember that true success lies with the help of Allah alone. If we abide by what which is lawful, and avoid that which is haram, our wealth will be blessed and beneficial in this world and the hereafter. What good extra money earned through Riba if there is no blessing in it, and it is cursed-a source of misery? To be productive, there should be barakah in our lives. It is also important to keep the life of this world in perspective and remember to be like a traveller. Don't trade a house (or palace insha Allah) in Jannah for a lowly house in this transient world.
Those who consume interest cannot stand [on the Day of Resurrection] except as one stands who is being beaten by Satan into insanity. That is because they say, "Trade is [just] like interest." But Allah has permitted trade and has forbidden interest. So whoever has received an admonition from his Lord and desists may have what is past, and his affair rests with Allah . But whoever returns to [dealing in interest or usury] – those are the companions of the Fire; they will abide eternally therein. (Surah Baqarah, verse 275).
Undoubtedly, riba/usury/interest is haram and a major sin, and if we have engaged in it then we must repent. We must remember that the life of this world is short and fleeting, and that the purpose of our existence is not to lust after beauty and wealth, but rather to worship Allah correctly and live in obedience to Him Subhanahu wa Ta'ala. Just because riba is widespread and common, like zina, pork and alcohol is nowadays, does not make it permissible. When the haram in this dunya seems easy, a productive Muslim should remember his ultimate goal and objective in life.
About the Author:
Zahir Abdul Latheef. A philanthropist and a social activist. Life dedicated to the timeless principles of Islam and in striving for a better world. Propagates Islamic message of good living and transparent beliefs. Currently pursuing Engineering studies in Bangalore, India. You can view his blog here: http://newmuslimkerala.wordpress.com/