Table of Contents

Handbook on Islam and Economic Life

Handbook on Islam and Economic Life

Edited by M. Kabir Hassan and Mervyn K. Lewis

Handbook on Islam and Economic Life is a unique study, one of the first of its kind to consider Islam within a broader economic sphere. Covering a wide breadth of topics and research, it explores how Islam impinges upon and seeks to shape major aspects of economic life including economic organisation, business and management, finance and investment, charity, mutuality and self-help, and government. It concludes by analysing the link between religion and development, the present economic situation in Arab countries and the causes of underdevelopment in Muslim countries.

Chapter 7: Riba in Islamic economics and finance

Monzer Kahf

Subjects: asian studies, asian economics, economics and finance, asian economics, islamic economics and finance

Extract

Freeing a society, in its entirety, from interest requires more than good intent. It needs a rule of law that works on eliminating interest from every aspect of business, financial transactions and exchange contracts. This is exactly what the Islamic Shari’ah does. There is always clear and intuitive avoidance of interest. With the revival of Islamic finance at the institutional level in the last quarter of the twentieth century, discussion of Riba came into focus again. Several contemporary writings on Islamic finance consider its prohibition the centerpiece of Islamic finance. However, Islamic finance cannot be defined by what it is not. It must be defined by what it is. Islamic finance can be defined as the provision of goods, services and means of payment with the counterpart being delayed for a future date. In other words, Islamic finance tools, instruments or contracts are only sale, lease and sharing.

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