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Sunday, December 2, 2012

INTERPRETATION OF THE QURANIC VERSES REGARDING LOAN


Assalam oalaikum,
The longest verse of the Quran, i.e. 2:282, which is known as Ayat-al-Mudayana, also speaks about the principles of loans. There is no mention of riba/interest in the entire verse as riba is strictly prohibited in Islam.
‘O you who have believed, when you contract a debt for a specified term, write it down and let a scribe write (it) between you in justice. Let know scribe refuse to write it as Allah has taught him. Sp let him write and let the one who has obligation dictate. And let him fear Allah, his Lord, and let him leave nothing out of it. But if the one who has the obligation is of limited understanding or weak or unable to dictate him self, then let his guardian dictate in justice. And bring to witness two witnesses from amongst your men. And if there are not two men (available) then one man and two women from those whom you accept as witnesses- so that if one of the women errs, the other one can remind her. And let not the witnesses refuse when they are called upon. And do not be (too
) weary to write it, whether it is small or large, for its specified term. That is more just in the sight of Allah and stronger as evidence and more likely to prevent doubt between you, except when it as immediate transaction which you conduct amongst yourself. For (then) there is no blame on you if you do not write it. And take witnesses when you conclude a contract. Let no scribe be harmed or witness. For if you do so indeed it is grave disobedience in you. And fear Allah and Allah teaches you. And Allah knows everything.

During the Jahilliyah period, if a person was unable to repay a loan, the lender would keep on increasing the rate of interest. Due to this cruel practice the original amount of the loan would increase to such an extent where its repayment would be next to impossible for the borrower. However, Islam has put an end to this inhuman custom. Allah (swt) has decreed in the Quran that if the borrower is bankrupt, insolvent and poor, then the question of charging interest from him does not arise. In fact, the lender should postpone the payment of debt till a time when the borrower can easily pay back the loan. By this ruling, the Quran advises the lender to treat the borrower in a lenient and gentle way. The lender can also forgive the loan altogether. This would be an act of charity on the part of the lender for which Allah (swt) will reward him greatly.
When we compare these two different ideologies we find that the practices during the period of Jahilliya were based on callousness, selfishness and cruelty whereas the Islamic practice is based on compassion, co-operation, brotherhood and mutual support. The loans of the capitalist societies are quite similar to loans during the period of Jahilliya.
Islam has encouraged benevolent lending instead of lending with a profit motive. According to Ibn Qudama, giving loans is encouraged in Islam because by lending a person is akin to providing relief, fulfilling the needs and offering help and support to his Muslim brother.




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