Is it Haram to Give Interest? Examining the Islamic Perspective on Usury

Is it Haram to Give Interest? Examining the Islamic Perspective on Usury


In Islamic finance, the concept of usury, or riba, is strictly prohibited. Usury refers to the practice of charging or giving excessive interest on loans. It is considered unjust and exploitative. However, the question arises: Is it haram to give interest? Let’s delve into the Islamic perspective on this matter.

is it haram
is it haram why

The Islamic View on Usury

In Islam, usury is unequivocally forbidden. The Quran explicitly condemns this practice, considering it as one of the major sins. Muslims are urged to avoid engaging in any transactions involving interest, be it lending or borrowing. The prohibition of usury aims to ensure fairness and justice in economic dealings, without exploiting others for personal gain.

Reasons Behind the Prohibition

The reasons behind the Islamic prohibition of usury are multifaceted. Firstly, usury is seen as an act of injustice and oppression. Charging excessive interest takes advantage of vulnerable individuals who are in need of financial assistance. Islam emphasizes the importance of compassion, empathy, and social responsibility, which are all tarnished by the practice of usury.

is it haram
is it haram why

Economic Consequences

From an economic perspective, the prohibition of usury promotes stability and discourages exploitative practices. When interest rates soar, people become burdened by debts, leading to financial instability and economic downturns. By eliminating usury, Islam aims to establish an equitable and sustainable economic system that benefits society as a whole.


In conclusion, Islam unequivocally prohibits the practice of usury in all its forms. Charging or giving interest is considered haram, as it contradicts the principles of fairness, justice, and compassion. By adhering to the Islamic perspective on usury, individuals and societies can strive for a more just and equitable economic system.

is it haram
is it haram why

Faqs about “is it haram to give interest”

Is it haram to give interest?

In Islam, giving and taking interest (riba) is considered haram, or forbidden. It is prohibited as it goes against the teachings of the Quran and the Hadith, which emphasize fairness and the avoidance of exploiting others. Muslims are encouraged to seek halal (permissible) alternatives to financial transactions that involve interest, such as profit-sharing arrangements, Islamic banking, or ethical investments.

What is the basis for considering interest as haram?

The prohibition of interest in Islam is based on several verses from the Quran and teachings of the Prophet Muhammad (peace be upon him). The Quran describes interest as a transaction that causes injustice and imbalance, and it is condemned in multiple verses (e.g., Quran 2:275-279). In the Hadith, the Prophet Muhammad explicitly forbade dealing with interest and warned of its detrimental effects on society.

Does the prohibition of interest apply to both giving and taking?

Yes, the prohibition of interest applies to both giving and taking. Islam discourages any involvement in transactions involving interest. It is advised for Muslims to avoid taking interest from others as well as abstaining from giving interest to others.

Are there any exceptions or alternatives to interest in Islam?

Yes, there are alternative financial arrangements that are permissible in Islam. For example, profit-sharing partnerships (Mudarabah), where the profits and losses are shared between the provider of funds and the entrepreneur, are allowed. Additionally, Islamic banking institutions offer various financial products that comply with Shariah principles, such as diminishing partnership (Musharakah Mutanaqisah) and leasing (Ijarah). It is recommended for Muslims to explore these halal alternatives.

What are the consequences of dealing with interest?

Engaging in transactions involving interest is considered a major sin in Islam. It is believed to have negative consequences in this life and in the hereafter. The Quran warns of severe punishment for those who persist in dealing with interest. Moreover, it can lead to economic inequality, exploitation, and social injustice within society.

Is there any flexibility regarding interest in extreme circumstances?

In extreme circumstances, where individuals face dire financial situations, there are Islamic juristic principles like Darurah (necessity) and Dharurat (substantial need) that can provide some flexibility. These principles allow for actions that are otherwise prohibited but become permissible due to the urgencies involved. However, this flexibility should be invoked cautiously and only in genuine emergencies.

Can Muslims invest in conventional interest-based financial products?

Islam discourages Muslims from investing in conventional interest-based financial products, as it involves benefiting from and supporting a prohibited practice. Muslims are encouraged to seek Shariah-compliant investments, such as Islamic mutual funds, Sukuk (Islamic bonds), and ethical investment options that align with Islamic principles.

What if someone has unknowingly dealt with interest in the past?

If someone has unknowingly dealt with interest in the past and later becomes aware of its prohibition, it is advised to repent sincerely and seek forgiveness from Allah. Islam emphasizes the importance of repentance and rectifying one’s actions once knowledge is acquired. Seeking forgiveness and making a sincere intention to avoid such dealings in the future is highly encouraged.

Is it permissible to receive interest in non-Muslim-majority countries?

The prohibition of interest applies to all Muslims regardless of their geographic location. Islam’s teachings are not limited to Muslim-majority countries. Muslims residing in non-Muslim-majority countries are also advised to avoid dealing with interest and seek halal alternatives for their financial transactions.

Can charitable organizations accept interest-based donations?

Scholars have differing opinions on whether charitable organizations can accept interest-based donations in order to use them for charitable purposes. Some scholars argue that accepting such donations may perpetuate the practice of interest, while others believe that if the funds are used exclusively for charitable purposes and there are no immediate halal alternatives available, it may be permissible. It is advisable to consult with knowledgeable scholars or Islamic organizations regarding the specific circumstances.

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