The term “istiglal” refers to the obtaining of profits and revenue from something. “Bey bi’listiğlâl” is the “bey bi’l-vefa” agreement that foresees the renting of the property to its vendor.[1]  There are three contracts merged into one contract in this case: sale, pledge, and rent. Someone that purchases a real property applying “bey bi’l-vefa” uses it or rents it. The most common way of leasing is to rent it to its vendor. Thus the property remains in the hands of its original owner.

      Those who accept “bey bi’l-vefa” claiming the constant needs of people to find a loan-providing segment, also refer to the same causes in order to accept “bey bi’listiğlâl”. Yet it is obvious that this is nothing else but the masking of usury behind the image of trading. If we had applied the prohibitions established by the Messenger of Allah, this would not have happened. “Bey bi’listiğlâl” and “bey bi’l-vefa” will be discussed in details in one of the following chapters.

      One day the “ummu veled”[5] of Zayd b. Erkam said to Aisha, “O mother of believers! I sold to Zayd a slave for 800 units in trust to the time of “ata”[6] He needed the money so I bought the slave for 700 units. Aisha said: “What an evil sale and what an evil purchase have you done! Warn Zayd that if he does not repent the jihad he did with the Messenger of Allah will be canceled. Upon these words the woman asked, “Is it good enough, if the purchase is withdrawn and I take back my 700 units?” “Sure it is!” she said and reminded the following verse:

 “…To whomever an admonition from his Lord comes and he ceases usury, what has passed is his; his situation is in the hands of Allah.” (The Cow/ Bakara 2 / 275)[7]

      The hadiths provided above together with the attitude of our mother Aisha demonstrate that the prohibition of including two “safkas” in one “safka” is in fact the prohibition of hiding interest-providing debt behind the image of trading. If Zayd b. Erkam purchases a slave for 800 units in trust and sells it for 700 units in cash, it means that he doesn’t really need the slave. From this perspective the seller: “…either decreases the price, otherwise he commits usury.”[8] As Zayd b. Erkam has been indebted with the higher amount, our mother Aisha is right to regard him as the one who committed usury.

      Nowadays transactions of this type are quite common among people. For instance, someone who needs cash money purchases an automobile for 11.000 units to be paid in 6 months. He sells the car for 10.000 units in cash to the automobile gallery owner. Thus he has been indebted 11.000 units for 10.000 units he got in cash. According to the holy hadith the gallery owner has to get 10.000 units or he will be regarded to have committed usury. This is also called “eyne sale” (بيع العينة). Another hadith of the Messenger of Allah in relation to this issue is as following:

“If you undertake eyne sale, get attached to the tail of the ox, confine yourselves with agriculture, and abandon your jihad, Allah releases baseness upon you and does not take it back till you return to your religion”[9]

      By commenting this hadith diversely Islamic jurisprudence scholars have not only narrowed trade transaction sphere but have also opened a door for usury. Those who have entered this door have violated the usury prohibition by preferring “muamele-i sher’iyye” and “ribh-i sher’i” sale methods and have established foundations that provide interest-bearing loans. This subject will be discussed in the “Muamele-i sher’iyye” and “Money Foundations” sections. On the other hand, the diverse commentaries of the hadith on the sale contracts which include two sales will be covered in “Maturity Period Difference and Usury” chapter.

[2] Mecellei –ahkam-i  adliyye 30^th Issue

[3] Tirmizi, Sunan, large ‘bab 18, hadith no 1231; Tirmizi’ye Hasen, and according to this hadith is authentic. Abdullah b. Amr, Ibn Omar and Ibn narrated on this matter and Mes’ud’un There. Ibn Omar narrated, the large ‘bab 68, hadith no 1309′dadır. Nesa, Sunan, Growth ‘, bab 73, hadith no 4632; Ahmed b. Hanbal, Müsned, II/71, 174, 175, 177, 179, 205 Beyhakî, es-Sünenu’l-kubra, hadith no 10660th, 10661 (Abu Hureyre’den) 10662 (Abdullah b. Amr legend); 11172 (Ibn Omar narrated)

[4] Abu Dawud, Sunan, large ‘bab 55, hadith no 3461, Muhammad b. Hibban (d. 354 h.) Sahih Ibn Hibban, Beirut 1993/1414, second edition, Shoaib elArnaut verify with c. 11, p. 348; Ahmad b. elHuseyn elBeyhakî (384/458 h.), Sünenu’l – Beyhakî el-Kubra, Mecca, 1994/1414, Investigation, Abdulkadir Mohammed Ata, No 1992/1413 registration Beyhakî 10661st riba, Beirut, c. 5, p. 343; Muhammad b. Abdullah elNeysâbûrî (321/405 h) el Müstedrek ale’s-sahihayn, Investigation, Mohammed Abdulkadir Ata, Hadith no 2292, Beirut 1990/1411.

[5] “Ummu Velde” is the slave wife –concubine- who has given children to her owner and cannot be sold gaining freedom after her owner’s death

[6] Ata (العطاء), was founded by Caliph Omar in court organization once a year from the spoils means the money is distributed. (Mustafa Fayda, “Ata”, article of Turkey Religious Islamic Encyclopedia Foundation, Istanbul c. IV, 1991.)

[7] Ibn Rushdie, Muhammad b. Ahmad b. Rushdie elKurtubî, Bidâyet’ül-müctehid and nihâyet’ül – muktesid, Egypt, c. II, p. 123124.

[8] Abu Dawud, Sunan, large ‘bab 55, hadith no 3461, Muhammad b. Hibban (d. 354 h.) Sahih Ibn Hibban, Beirut 1993/1414, second edition, Shoaib elArnaut verify with c. 11, p. 348; Ahmad b. elHuseyn elBeyhakî (384/458 h.), Sünenu’l – Beyhakî el-Kubra, Mecca, 1994/1414, Investigation, Abdulkadir Mohammed Ata, No 1992/1413 registration Beyhakî 10661st riba, Beirut, c. 5, p. 343; Muhammad b. Abdullah
elNeysâbûrî (321/405 h) el-Müstedrek ale’s-sahihayn, Investigation, Mohammed
Abdulkadir Ata, Hadith no 2292, Beirut 1990/1411.

[9] Abu Dawud, Sunan, large ‘bab 56, hadith no 3462, Ahmed b. Hanbal, Müsned, 2 / 84; Zeylan, Nasbur-Ra, Cairo, 1357, c. 4, p. 1617, In this book of hadith tahrici made to be precise and the sika’dan where rical has been found.

“Those who eat usury cannot behave different from those who have been deceived by Shaitan. This is the reason they say, “Trading is just like usury”. Allah has allowed trading and forbidden usury…” (The Cow/ Bakara, 2 / 275)
      The Messenger of Allah has claimed: “Usury/ Interest can be only in debt.”[1] 

      In fact, people do not really need to exchange gold for gold, silver, silver, wheat for wheat, salt for salt, and dates for dates. However, this method can be relied upon in a place where trading is allowed and usury is forbidden in order to demonstrate usury as if it was trading. These words of the Messenger of Allah point to this:

“Do not sell one dinar for two dinars, one drachma for two drachmas and one sa[2] for two sa’s; I fear you might commit usury.”[3]

                                                      
      The phrase “I fear you might commit usury,” is important. The exchange of golden coins with a golden bracelet is genuine trading. Similarly, the offering of wheat in order to obtain the needed wheat flour is trading. In addition someone who needs sea salt exchanges it with the rock salt he might posses and this is also trading. The turning of such a trading process into interest-providing debt can be done by the performing of the sale on trust or by the exchanging of goods of unequal values. For this reason our Prophet has prevented usury by requiring the exchange of these six to be undertaken on the spot (cash) and scale to scale. Moreover he has allowed the exchange to take place if there was no fear of this exchange to be a means to usury. For example, even though he has forbidden the exchange of fresh dates with dried dates, he allowed the exchange of fresh dates on the tree with fresh or dried dates as a consummated domestic good[4]. We will focus later on these sale methods called “ariyye” and “araya”.

   The term “misil” (مثل) stands for equivalence between two things and expresses sameness. If referring to paying and price, the term means the paying of an equal value neither more, nor less. So in English it has been translated as scale to scale. Lisanü’l -Arab, gives the following information in relation to this term:
“Ibn Berri said that there is a difference between mümâselet (the condition of a misil for a misil – equivalence-) and müsâvât (equality). There can be müsâvât among goods of different genus and also among goods of the same genus, because müsâvât refers to the quantity. This means that one (of the goods) is neither more in quantity, nor less. However, the condition of mumaselet, meaning the condition of equivalence between two goods is relevant only for goods of the same type. Plainly the meaning of the phrase, “This is its misil” is “This can replace it.” If it is said that “This is its misil in this aspect”, it means that a good is the equivalent of that other in that aspect, but it is different from other perspectives.[5]
      There are a number of words in Arabic that refer to various shared features of things. Ragib el-Isfahânî provides the following information in relation to this subject:
Nidd (الند) refers only to mutuality/ partnership in essence.

Şibh (الشبه) refers only to mutuality in terms of quality and features.
Musavi (المساوي) refers to mutuality in terms of quantity and numbers.

Shekil (الشكل) refers to mutuality only in terms of size and dimensions

Misil (ال مث ل) refers to mutuality in all aspects mentioned above. The Glorified Allah has expressed that nothing is similar to Him in any aspects by the term “misil” commanding:
ليس كمثله شي ء.

“There is nothing misil (alike) to Him.” (The Counsel/ Shuura 42/11)[6]

      The hadiths have foreseen the exchange of gold, silver, wheat, barley, salt and dates with its own genus to be undertaken immediately (in cash) and in equal scales; as there might be a need to exchange golden coins for golden bracelets, silver coins for silver belts, pasta wheat for bread wheat and so on.

      The point of the hadiths is clear: If the exchange of this wheat with that wheat is supposed to be undertaken, the exchanged amounts have to be equal. If there is such a belief that a certain amount of wheat is more qualitative than others, then the selling of the wheat and the purchasing of another amount of wheat with that money is more adequate. For example, a person might sell his wheat for 1 unit and buy another for 0.9 units.

      The Messenger of Allah gave a duty to someone in Haiber. He brought dates of a good quality. “Are all the dates of Haiber of this quality?” he asked.

“No, by Allah, O Messenger of Allah! We get one sa[7] of this for two sa’s of the other and two sa’s of this for three sa’s of the other. Upon this he commanded:

“Do not do that; sell the dates you have collected for drachmas and later buy the qualitative dates with those drachmas.”

      Let’s see the usury doors the hadiths above have closed.

      1. The Exchange of the Six Goods with their own Genus Immediately (In Cash)

      The precondition to undertake their exchange immediately and in equal scales for the chief goods that can be lent has closed the main door to usury. Otherwise, the lending of 10 units in order to obtain 11 units would be considered usury, but the selling of 10 units for 11 units in an extended period would be concluded acceptable and the prohibition of usury would lose its meaning.
      2. The Exchange of Six Goods with their own Genus in Equal Scales

      The real target of the moneylender is to obtain 11 units for the 10 units he lent. If he is able to achieve this through a legitimate process, there is no need for him to turn this into debt. He first lends 11 units undertaking the necessary preconditions and later buys the 11 units in the hands of the debtor for 10 units in cash. Thus the debtor obtains 10 units but his debt is 11 units. Also, money-lending- institutions might be found this way. One of the desks lends 11 units to be paid in a year whereas that money can be sold for 10 units at the second desk. This is how the business goes on. If this process is not regarded as usury and is not prohibited, the prohibition of usury loses its meaning.

      Thus, in the old times in order to ensure the moneylender interest in legal terms a fake sale named muamele-i sheriyye was undertaken. For instance, the person who wanted to obtain a loan would place one of his properties in front of the moneylender and would say: “I sold it to you for 10 golden coins”. The moneylender would take the property and give him the money. Later he would tell to the debtor, “I am selling this property to you for 11 golden coins to be paid in a year’s time”. Thus, the debtor would take back his property and the 10 golden coins he was supposed to pay back with 11 golden coins in a year’s time. There were also other procedures for this.

      If it had been based on the verses of the Koran and the hadiths had been considered from the righteous perspective of Koran-Sunnah unity the muamele-i sheriyye would not have been given an option. This issue will be discussed in details in the following chapters.

      3. The Exchange of Six Goods with their own Genus in Trust

      If the exchange is undertaken in equal amounts but not immediately (in cash), usury might take place by the exchanging of a low-quality good with a good of the same genus and a higher quality after a period of time. The governor of Haiber brought the Messenger of Allah janib (high-quality) dates. He asked, “Are all the dates of Haiber of this quality?”. The governor replied, ““No, by Allah, O Messenger of Allah! We get one sa[8] of this for two sa’s of the other.” The Messenger of Allah said:

لا تفعلو ا. ولكن مثلا بمث ل. أو بيعوا هذا واشتروا بثمنه من
هذ ا. وكذلك الميزان.

“Do not do that, but it can be done a scale for scale. Or sell this and buy the other with its money. Balance is achieved this way.”[9]

 
      If there was not such a prohibition, a person in need would be given 100 kilograms of low-quality dates and would be required to bring 100 kilograms of janib (high-quality) dates. Due to the quality difference between the two types of dates the obtained interest would be about 50%.

      4. The Exchange Due to a Period of Time of Goods of the Same Category
      Gold and silver, as well as wheat and barley are goods of the same category; thus they can be used instead of each-other. The rates between their values do not change significantly in long periods of time. Their exchange in extended periods of time, arises the opportunity to include the transaction into the debt concept. Hadiths have closed this door by forbidding their deferred exchange.
      For example, if one dinar is worth 10 drachmas, 1000 drachmas are worth 100 dinar. If the deferred exchange of these values had been possible, the moneylender would sell his 1000 drachmas for 110 dinars in a year’s time and he would be lending money with a 10% interest rate hidden behind the image of trade. The same is also possible for barley and wheat.  If the value of two kilos of wheat is equal to the value of three kilos of barley, 200 kg wheat are given in order to receive 400 kg barley in a year’s time, thus demonstrating debt usury as a form of trading. Hadiths have closed this door too, by considering this not as a type of trading of, but as an interest-bearing transaction.

      According to this, foreign currency is not allowed to be purchased due to a different time. As they are good of the same category and hold the ability to replace each other it is not difficult to understand that they can easily become means to applying usury. The precondition for their in cash exchange, has closed that door.

      5. The Exchange of Money in Compliance with their Value of the Day

      In the hadith of Abdullah b. Omar (r.a.) mentioned above, the exchange of dinar with drachma in cash has not been considered sufficient; moreover, its undertaking in compliance with the daily exchange rate has been required. Because of, the moneylender lends 11 dinars when 1 dinar is equal to 10 drachmas and takes all the necessary precautions and later on purchases the 11 dinars with 100 drachmas. Thus, he has lent 100 drachmas with a 10% interest rate.

      The exchange of these goods in compliance with the daily exchange rate has closed this door. Consequently, these hadiths have significantly minimized the opportunity of masking usury under the image of trade. Other opportunities have been debunked by other hadiths. 

      The minimization of the opportunity to apply usury has also led to a number of problems. For example, according to the hadiths jewelers can purchase golden bracelets by giving scrap of gold or other forms of the metal only by undertaking the exchange immediately (in cash) and in equal scales. As nobody would do this, the sale of golden bracelets can be done only by their purchasing with silver or any other type of currency.

      The problems the banning of usury have led to, have also led to a big benefit as the significant minimization of the opportunity to apply usury is. Such a situation deserves being the reason behind this ban. In fact, the clarification of the ban of alcohol and gambling has been done as below:

“They ask you about alcoholic drinks and games of chance. Say: In both of them there is a great sin and also means of profit for mankind. Yet their sin is greater than their profit.”  (The Cow/ Bakara 2 / 219)

     In Islamic jurisprudence, this issue has been defined on these bases: “Def mefâsid the celb-i

menâfi’den evlâdır.”[10]  That is, the elimination of harmful things is preferred to the obtaining of useful ones. If hadiths had not commanded these bans, institutions that would offer interest-bearing loans under the image of the trading of valuable goods would have been founded, which would have made the prohibition of usury meaningless.

[2] According to the Hanafi sect a sa is a scale that contains about three kilograms (2920 grams) of wheat or barley.

[3]

[4]

[5]

[6]

[7] According to the Hanafi sect a sa is a scale that contains about three kilograms (2920 grams) of wheat or barley.

[8] According to the Hanafi sect a sa is a scale that contains about three kilograms (2920 grams) of wheat or barley.

[9]

[10] Ibn Manzur, Lisanu’l-Arab, chapter “SFK”

      Whatever Allah- the holder of all creatures- does, is beautifully done. His beneficence is infinite and his mercy abundant. He is the sovereign of the Judgment Day. He is the only to whom we are slaves and the only to ask help from .Selam and Salat to His messenger Mohamed, to his family and to the ones who follow his path.

      Income is the profit made by the selling of properties, the profit made by the rent gained as the result of a property given to use, or the profit made by the fulfillment of tasks (job). These actions should be firmed with the mutual consent and free of the false ways; otherwise, the lack of fulfillment of one of the sides leads to demolishment. The Glorified Allah commands:

“You who believe do not devour your property among yourselves falsely, except that it is trading by your mutual consent. Do not kill yourselves; surely Allah is Merciful to you. Whoever does this in a hostile way and unjustly, We will soon cast him into fire. This is easy to Allah. (an-Nisa /the Women 4/29-30)

      Trading is the selling of goods and services, while interest is the profiting from the loan. Trade and interest might be as old as human history. Islam has regarded interest as a baseless way of income and has banned it. This work is the comparative study of trade and interest.

      The book is the product of the collection of the many studies undertaken with various academics and businessmen since 1973 as well as the collection of the answers of the questions of ordinary people. I want to thank everyone who has contributed.

      The endeavor belongs to us while the success belongs to Allah.

                                                                                           Prof. Dr. Abdulaziz Bayindir

                                                                                               Istanbul University

                                                                                          The Faculty of Theology
                                                                                             Academic Staff

                                                                                               Istanbul –September 2007

“O believers, do not devour your property among yourselves in batil/false ways, but by its trading with your mutual consent. Do not murder yourselves/ your people. Allah is Merciful to you.” (The Women/ an-Nisa 4 / 29)

      The Messenger of Allah has claimed: “If there is no voluntary will, nobody’s property is lawful to anyone.”[1]

      According to the Hanafi and Mâliki sects, “trade is the exchanging of goods with one another.”[2] Loan is the same, because who borrows 10 units consumes it and pays off his debt with other 10 units. As a consequence, this explanation has led to the confusing of trade and loan with each other. As usury is the income obtained by the debt, trading has also been confused with interest bearing procedures. As it will be seen below, this confusion is inevitable because these sects consider the interest-bearing procedures (الربا) part of sales (بيع).

      According to the Shafi sect, trading is “the exchange of a property with another in order to get hold or permanently benefit from it.”[3] As a loan cannot provide permanent benefit, it remains out of this definition.

      According to the Hanbelis, trading is “the (timely) indefinite exchange, without usury –riba- and not in loan, of a good or of a permitted –mubah- property with another good or property.”[4] The considering of the debt separately from trade of the last two sects is righteous, but their considering of usury –riba- as part of trade contradicts it.

      The exchanging of diverse goods if trade. The exchanging bread with money, of pasta wheat with wheat seeds, and of bullion gold with processed gold are examples to this exchange. Diversity is essential in order to lead to meet the need and breed demand. For this reason the definition should be: “Trade is the exchange of two diverse goods”.

      F- RELATED CONCEPTS

      In order to understand this subject better it is essential to explain concepts such as debt, loan, interest-bearing debt, maturity time difference, money market (stock market) and property market.       
1. Debt and Loan
      Debt (deyn / الدين) is the payment burden arising from a contract or a compensation agreement. Loan (karz / القرض) is the debt taken to be consumed and later be paid of with equivalent. Each loan is a debt, but each debt is not a loan. Two bushels of wheat taken in order to be paid later are both a loan and a debt. If that wheat is taken in trust to be paid with two golden coins, the two golden coins are a debt but not a loan.

      The person who takes a loan consumes it as it were his own property and pays his loan off with the equivalent. For example somebody that gets 100 gram of gold or a bushel of wheat as a loan consumes it as he wishes. Later he gets rid of his debt by paying back the loan-giver with another bushel of wheat or 100 grams of gold. The loan is usually given to someone in difficulty. It has been reported that the Messenger of Allah has claimed:

      “Each loan is charity –sadaka-.”[5]

      “Whoever helps a person in a difficult situation by resolving his problem, God will also help him in this world and in the Hereafter.”[6]

      The loan is paid back with no excess or shortage. If someone pays back his debt with an extra amount, he has done a good deed. As this issue is not based on a contract the extra amount is not regarded as usury. The interest-free loan is called karz-ı hasen (القرض الحسن).

2. Money Market and Property Market

      As trade is based on the operations of goods and interest-bearing transactions are based on the operations of money two different markets were born; these are the money market and the property market. These have become separate organizations and agencies. The money market institutions form the financial sector, while the property market institutions form the MALI (fiscal/ financial) sector, and what separates these two segments from each other is usury.

      Property market is variable, but money market is inflexible. Prices are formed in the property market, while interest rates are formed n the money market.
      It is quite natural for the property market to be variable. As in trade diverse goods are exchanged the sides attempt to find a common ground. Their “meeting point” is the price. The price is formed in compliance with the market. A good may be purchased for 5 units in a place and for 15 in another.

      Similarly, it is quite natural for the money markets to be inflexible, because interest-bearing transactions maintain the same features. The 100 units in the hands of a worker are equivalent with 100 units in the hands of a merchant, with 100 units in the hands of a businessman, and with 100 units in the cases of banks. For this reason the interest rate is not affected by the environment where it takes place; the interest rate is the same in luxurious neighborhoods and suburbs. 

      The trade of goods can be undertaken in cash and instantly or in term credit, but the interest-bearing transaction cannot be instantly paid. In other words, the debt which is paid immediately cannot have an interest rate.

      People do not usually borrow small amounts of money -such as those needed to buy a pencil- to pay back with the interest. Interest- bearing loans are borrowed for significant amounts. One of the foundation goals of banks is the collecting of small amounts of savings in order to create large quantities of money.

      The price of the purchased goods decreases as the quantity of the purchased goods increases. For example if a single pencil is purchased with 1 unit, a parcel of pencils might be purchased for 9 units. If the amount increases to 10 parcels, the price might be 8 units and if the amount becomes 100 parcels the price might even become 7 units each, because the higher the amount of the sold goods the higher the profit of the tradesman selling them. However, the situation is the opposite for interest-bearing bank loans. The higher the amount required the higher is the interest rate, because the higher is the required loan the higher is the risk of the debtor not to pay it back.

3. Maturity (Time) Difference

      Maturity difference is the difference between the price of a good when it is sold in cash, on the spot, and the price of this good when the paying time is deferred to a future fixed date.  This has nothing to do with usury, because this is not a way of benefiting from the loan but a method of trading. The way there is a different in price between wholesaling and retailing, that way there is a price difference between selling on the spot –in cash- and termed –deferred- selling. It is the nature of the action that requires it. This subject will be examined in details in another chapter.

      The essential form of trading is the one done on the spot providing a profit for the seller. However, an instantly paid off debt bears no interest. In order to benefit from the loan it is essential to recognize a period to the borrower. The seller of a property might sell for 10 units on the spot what he has purchased for 8 units making a profit of 2 units. Yet, this is not a way to provide interest income.

[2]

[3]

[4]

[5]

[6]

“Those who eat usury cannot behave different from those who have been deceived[1] by Shaitan. This is the reason they say, “Trading is just like usury”. Allah has allowed trading and forbidden usury. To whomever an admonition from his Lord comes and he ceases usury, what has passed is his; his situation is in the hands of Allah. Whoever goes on, it is these who are from the inhabitants of hell. They will remain there forever.” (The Cow/ Bakara, 2 / 275) 
      The deductions of Fahreddin Razî in relation to this issue can be summarized as below:

  “According to those who consider usury helal – acceptable- usury is similar to trade in all aspects. Then how is it possible for one to be helal –acceptable- and for the other to be haram- forbidden-. If it is helal –acceptable- to sell a good, whose price is 10 units in cash, for 11 units in a month’s time then the selling of 10 units for 11 units after a month should be acceptable. There is no logical difference between these two processes.”[2]

      It is true that between these two processes there are similarities, but there are also dissimilarities. In fact grape and grape cider are also alike; they are both grape juice. However, due to the dissimilarities between the two it cannot be deduced that “grape cider is like wine.” The two procedures above are also different. For this reason, one of them has been called debt and the other trade. Whoever gives a loan, takes back the equivalent (amount) of hid debt. In other words, if he has given 10 units he is repaid with 10 units. Usury/ Interest is the excess that impairs this balance. If the price of a good in cash is 10 units and it is sold for 11 units to be paid in a month’s time, the price of this good becomes the whole 11 units. As there is no balance between that good and 10 or 11 units there is no excess as well.

      This disparity leads to a number of other disparities. For example, trade can be instant and in cash but a debt cannot be cash. Nobody takes a loan in order to pay it instantly; even if it can be short a period of time is necessary. A vendor makes a profit of 2 units if he sells in cash and instantly a good he has taken for 8 units. Nevertheless, interest income cannot be obtained this way. This issue will be discussed in the chapter “Time Period/ Maturity Period Difference and Usury”    

      A second deduction of Fahreddin Razi can be summarized as follows:

“Moneylenders maintain that the reason trade is considered -helal- acceptable is related with the fact it meets the needs of people. Also usury meets the needs of people. A man who is need for money today might get hold of any possession in the future. If usury is banned this man would not be given anything from any of the rich people and he remains in trouble and need. However, if usury is allowed the owner of money gives the person in need with the hope to get more in the future. The debtor pays off his debt together with the excess rate when he gets hold of money. It is better for the person in need to pay a higher amount after he has got hold of money than being in serious need till that time. Then usury should be -helal- acceptable. As in fact the reason various types of trading are –helal- acceptable is the fact they meet the needs of people.”[3]

      If the single reason for something to be -helal- acceptable is the fact it meets the needs of someone then theft, falsehood, adultery, and so on should be also –helal- acceptable. Reasonable grounds can be found for these as well.

      If usury is considered the same as usury, then adultery can be considered the same as marriage. It has been reported that the Messenger of Allah claimed: “If usury and adultery come about in a society, it has deserved the punishment of Allah.”[4] Nevertheless the sexual intercourse of husband and wife is the same as the sexual intercourse between adulterers. Nevertheless, with marriage a family is established; the spouses undertake mutual rights and responsibilities, while adultery consists of a short-term pleasure. In a meeting held at Suleymaniye Vakfi in Istanbul, regarding this issue Sabri Orman maintained:

      “We notice that a marital relationship is truly different from the non-marital relationship when we consider its political, economic, social, cultural and psychological consequences. The same can be said in relation to trade and usury. Both resemble each other. Yet, the structure and consequences of an interest system and an interest-free system are quite different from each other. If we follow this logical line to the end we notice that the interest-based economic system cannot possibly complement with the general structure of Islam. The prohibition of usury is the -menfi- manifestation of what has been expressed as -muspet-. In other words, if usury is not banned, the creation of a society based on the principle of brotherhood is not possible. If usury is not banned, the creation of individuals that will maintain a purely emir bilmaruf nehyi anil munkeri[5] character is not possible.  These are the basis of Islam. Even though usury and trade look similar to each other, if we follow the logical thread to their consequences we will see that an economic system based on interest is totally different from an interest-free economic system. Thus, the banning of usury is one of the essential conditions of Islam.”

      In the verse mentioned above, this phrase is mentioned:

“Those who eat usury cannot behave different from those who have been deceived[6] by Shaitan. This is the reason they say, “Trading is just like usury”.

      The considering of usury the same as trade is truthfully an evil attitude. If they were the same, banks could also rely o trading. Today, trading is prohibited to all banks all over the world. 

      In countries where usury/interest is not prohibited, even though trade is permitted, in order to provide interest-bearing loans permission should be obtained by authorities. Organizations and individuals that have not received the necessary permission cannot give interest-bearing debts. This demonstrates that usury is prohibited even in these countries and can be done only under the supervision of the state. This demonstrates the universality of Koran’s prohibitions.

[2]

[3]

[4]

[5] Emir bilmaruf nehyi anil munkeri means “to command the good, and ban the bad”.

[6] The phrase (______) mentioned in the verse has usually been translated as “those who are touched and paralyzed/ hit by the Shaitan”. In our opinion this translation does not give the righteous meaning of the phrase. The Arabic phrase (_____) at the same time refers to (______) ( Lisanu’l- Arab, issue —), which means the persuading of someone by deceiving him.

“O believers! Fear Allah! If you are of the believers relinquish what remains (due) from usury. If you do not do it, then you are in war with Allah and His Messenger. If you repent, then you keep your capital. Neither will you suffer injustice, nor will you be made to suffer injustice.” (The Cow/ Bakara 2/278-279)

      War against Allah and His Messengers is war against harmony and peace in social order. As the rules are set by Allah, disruptive behavior is regarded as negative attitude towards Allah. The consequences of such a war have been transmitted by such a verse in the Koran, which have been revealed to be the words of the queen of Saba:

“(She said): Leaders, when they conquest a country, ruin the order of that place; (they) turn honorable people into dishonorable ones. Thus they do.” (The Ant/ Neml 27/34)

      As shown above, usury ruins the social order and the relationships among people. It leads to the distribution of income and wealth in unequally, to the shrinking of the middle class, and to the creation of an immense gap between the rich and the poor. While one of the sides attempt to live under serious burdens, the other side experiences the pleasure of making easy money. It leads to social tension and abrupt explosions. Familial ties weaken what are followed by rises in the divorce rates and in the homeless people number due to increase in the case of children abandonment and running away. Morality and virtue are also devaluated. The number of wealthy people who provide help for poor ones decreases, as well. Love and respect boundaries lose their value. The number of hopeless people and criminals increases. 
      Usury increasing the cost goods and services increases the need for money. Above it was demonstrated how people, who had saved money, deposited it with a 5% interest in banks and in seven years what seemed to be a profit of 50% over their capital was in fact a loss reaching about 62% of their original capital. The loss of those who do not deposit their money in the banks is even bigger. For instance If someone who owns 50 units when the kilo of sugar is 0.5 units, with his money he can buy 100 kilos of sugar. Due to usury after seven years this person’s money is enough to buy only about 26 kilos of sugar which has increased at about 1. 95 units due to the reasons mentioned above. His money has been devaluated with a rate of about 74 %, because his money has lost value of about 74% in relation to sugar. If this is considered to reflect the general level of prices, then the equilibrium fund- property has been affected and it is noticed that money at a rate of 74% is needed in the markets. Warehouses are full of goods and people in need but as there is a shortage in money there is almost no customer for the goods and services what also leads people to hopelessness. Even those who got hold of the money of the people through interest find nobody to offer their credits. Similarly, they find no peace as people hold them responsible for the troubles in economy as well as for its effects. These people have been warned with this verse:

“For those who hoard up gold and silver in their cases/boxes and do not spend it in the way of Allah way, announce to them a painful (hell) torment (adhap).” (Repentance/ Tewbe 9/34

      The heartrending torment first takes place in this world. In environments, where there is no infak, theft, extortion, anarchy and so on occurs. People are obliged to protect their lives and their properties. Painful torment has been reserved for those who do not make infak with their properties even in the hereafter.

      As it is easy to produce banknotes in the countries relying on this type of monetary systems governments meet their needs this way. As in our example where the circulating money is 2 million units in order to reach equilibrium once more 1.480.000 should be manufactured and distributed to people who were affected by the interest rates negatively. Nevertheless, this is not done. Mostly, a significant portion of this money is distributed to those close to the government under labels such as investment incentives. This has even a worse effect. A very small number of people that is close to the government is given the opportunity to manage very high capitals. Some politicians and bureaucrats become confidential partners.

      In order to get control over the management of all goods and services, the rich sell cheap shoddy imported goods to small tradesmen and peasants, who are thus bankrupted. Holding the hope to find a job even more people find themselves pleading to rich people or to the government. This also marks the creation of two poles: the very rich and the very poor.
      The rich can also raise the prices of goods and services. This in fact is for their benefit. For example, if seven years ago they had to sell 1000 kilos of sugar in order to cover a debt of 1000 units, now the selling of 513 kilos is sufficient.

      In such a situation, as the debtor benefits, the number and amounts of debts not paid in the due time increases. It is the banks that are most profoundly affected by this. For this reason, banks increase the interest rates over the loans, while the vicious circle becomes even crueler for most people.

      The Messenger of Allah claims:

      “Avoid those seven things that drag you to disaster.”

      “O Messenger of Allah, which are them?”

      “The considering of someone as Allah’s companion (shirk/ hubris), magic, the murdering of someone Allah has claimed untouchable with no legitimate reason, usury, the consuming of the orphans’ capital, deserting when a collective attack against the enemy is about to be undertaken, and slander with adultery pure honorable believing women who has nothing to do with bad behaviors.” 
      The Messenger of Allah has also claimed:

      “May Allah’s curse/ damnation be upon those who eat usury and make others eat it!”

      “The night I was issued to Miraj I saw a man swimming in a river who was made to swallow stones. “Who is this?” I asked. I was told, “He is he who ate usury 
      “The Messenger of Allah has put his curse upon him who eats usury, who makes others eat it, who bear witness for him, who writes it (the account of usury); upon him who makes tatooes, or makes/ forces others to make them (on him) to beautify himself; and those who commit hulleor who wants to force/ make others do it. He also forbade wailing while crying after the dead.”

[5] A man cannot marry a woman he has divorced three times in a row. Nevertheless, after this woman has been married to another man and this man has died or they divorced, she can marry the first husband after awaiting her iddet, Iddet is the awaiting period prescribed by the Koran for a woman after finishing a marriage and before entering another. Some people make a marriage contract with a woman that has been divorced three times by her husband and after the first night divorce her so that her marriage with the first husband can be acceptable again. This is called hulle. In the hadith above this attitude has been cursed as well.

“Whatever you lay out as usury, so that it may increase in the property of men, it will not increase for Allah. Whatever you give as charity, desiring Allah’s pleasure- it is those charity givers who will get manifold.” (Ar-Room/ The Romans, 30/39)

“Allah desecrated (deteriorates) usury, and causes charitable deeds to prosper. Allah does not love any ungrateful sinner. (Al-Baqara/The Cow 2/276)
      As Allah is the One to imply the rules, the mentioned deterioration and prosperity point to a command and warn by informing that usury will lead to deterioration while charity will lead to prosperity.

      The loan with interest –usury- is only given to those who guarantee to pay it off. As the number of the people who can guarantee this is limited, this minority takes all the credits and thus has in its hands the money of the whole society. In other words, the credit system bears serious problems from the beginning.

      Let’s think about an economy where the money in the markets is 2 million units[1]. If

1 million units enter from outside the markets for a short period, a positive waving will be noticed. If the interest over this money is 10%, the money taken from the markets at the end of the agreed period is 1.100.000 units. In order to make this positive waving go on this amount is urgently needed in the markets. If this money is supplied by interest-bearing debts (usury) at the end of the term the money left in markets would be 1.790.000 units. If this happens seven times the money left in the markets would be 1.050.000 lira.

      Even if this money is secured within the country with the support of a bank, the decrease of the money from 2 million to 1 million units is unavoidable as the used system would be usury. The 1 million drawn out of the markets would be in the hands of a certain number of people.

      If the bank offers the money it has collected -this 1 million- as a loan with 10% interest, on the agreed payment day the money withdrawn from the markets would be 900.000 lira. The absence of 1.100.000 lira would be felt in the markets, what would lead to the need of 1.100.000 loan to keep the markets going. As it would be also given with interest the free remaining amount would be 790.000. If this process is repeated seven times the freely circulating money, the money not under the control of this bank, would be about 50.000 units. In the mean time, prices would have increased and poverty would have multiplied tremendously.

      If the bank offers an interest rate of 5% to the saving owners, in 7 years’ time their money would have increased to 1,475,000, and they seem to have a profit of about 50%. In fact their losses are also big. People who make business in places where there is no credit system consider themselves to have gained if they are able to afford their expenses and secure their living. They do not pay any cost for money. However, when the credit system emerges interest becomes the cost of the money and this reflects in prices. As in our example where the interest rate of the is 10 %, the 5% interest of the savings is no benefit, because the interest rate of the loan which reflected on the prices of the goods will not only consume their profit from the interest but their capitals as well. For instance, somebody deposits 50 units in the bank with an interest rate of 5%, in a time when the kilo of sugar is 0, 5 units. After seven years he can take 73.75 units, his original capital included, but during this period the kilo of sugar becomes at least 1, 95 units. Before seven years with the amount of money he deposited in the bank, the citizen could buy 100 kilos of sugar, while now with his 73, 75 units he can purchase only about 38 kilos of sugar. Thus his money has been devaluated in a rate of about 62 %.      

      Agriculture, trade and industry, which form the lifeblood of society, do not deposit their money in banks, because they have to utilize it in production. However, as usury has decreased the freely circulating amount of money in a rate of 1: 20, even these sectors have serious difficulties in business.

      Those who take loans with a 10% interest rate, charge at least 20% of profit on the goods and services they sell in order to afford their interest rates.  If things go well the profit they obtain at the end of the year through credit is 100.000 units. As the business owners are able to afford their expenses with the opportunities this money provides, this amount is net profit. As the bank loan they will receive the following year is 1.100.000 their additional profit is 110,000 units. At the end of seven years the additional profit that they obtain is about 950,000 units. Thus this business grew up, but the market shrank. Those businesses, whose incomes are lower than the bank loan interests, are bankrupted.

      The 950.000 units gained by those who relied upon bank loans, is not in cash. They use most of this money to purchase real estate. So that the market does not lose its vitality, the value of these real estates falls. As that place (where these real estates are found) loses its attraction, these people leave and move towards other locations. The Messenger of Allah has commanded:

“Even if the interest income is high, it turns into shortage at the end.”

“The time usury arises in a society; (they) are caught in/ it brings along famine. The time bribery arises in a society, it brings along fear”
Parsimony is part of human nature, of their fitra. Usury stimulates this parsimony. In order to lay it out in interest, the money should be first accumulated. The accumulation of money means its drag out of the markets. There is no command in relation to accumulation in the Koran. All commands are related to infak. The Glorified Allah commands:

“Your possessions and your children are only to try (you); the great reward is with Allah. Therefore be careful of (your duty to) Allah as much as you can. Listen, obey and make infak (spend and share) for your better. Whoever defends himself from the greediness/ parsimony of his soul gets what he hopes for. If you set apart a good portion for Allah, He will multiply it for you and forgive you; Allah does not leave the goodness without reward and He forbears (treats softly).” (Teğabun 64/15-17)

      “Nafak” is a tunnel in Arabic. The first definition of the word “infak” refers to the passing through the tunnel. Every expense someone does for himself, for his family, for the people, whose maintenance he has assumed, or for hayr –charity or good intention- is called nafaka. Expenses undertaken for hayr are also loans given to Allah, because who gives his money for hayr expects its pay back only from Allah.

      Money providing the flow of goods and services is the basis of economy. It must circulate like the blood in the body. The way blood transports the necessary nutrition to every cell of the body, similarly money provides people with their necessary goods and services. If money does not circulate or if its circulation is limited goods and services are wasted leading to famine and misery.  

      Zekat and sadaka (charity) are infak in Allah’s way. In order to revive the market, to create an environment of trust and satisfaction, and to lead all classes to beneficial works infak is obligatory. Otherwise life is dominated by dangerous developments. The Glorified Allah commands:

“Make infak (spend) in the way of Allah. Do not cast yourselves to perdition with your own hands. Do good (things). Allah loves those who do good (things).” (The Cow/ Bakara 2 / 195)

      The infak undertaken in the way of Allah has a multiplying effect. The poor consumes the zekat and sadaka (charity). If it has been given in cash he spends it. For instance, he gives his debt to the grocer. Following the grocer gives it to the wholesaler, who gives it to the workers.

The worker spends it for his own need… Thus the market gains new costumers. Similarly to the blood that circulates through capillaries to every part of the body, income and wealth this way reach every part of the society. As it affords the needs of every person that takes hold of the money the market is revitalized. A unit expense sometimes can turn into 700 units, at least the needs it affords multiplying might reach these proportions when considered in monetary goods. Those who become the cause of this gain the sevap –good deed- in Allah’s way and also provide from the revival of the markets. While usury leads to shortage, the infak of the capital leads to its multiplying.  The Glorified Allah commands:

“The situation of those who spend their property in the way of Allah resembles the situation of a grain growing seven ears (spikes). There are a hundred grains in every ear.  Allah multiplies for whom spends. The possibilities of Allah are generous. He is all-Knowing” (The Cow/ Bakara 2 / 261)

      Usury leads to the flowing of the wealth to the rich. On the other hand, zekat makes possible the flow of the wealth from the rich to the poor. This increases the purchasing potential of the people and turns them into the new costumers of the market.

“O believers! Do not devour usury that doubles and redoubles. Be careful of (your duty to) Allah, that you may be successful in achieving what you want.”(Al-i Imran/ the House of Imran, 3/130)

      Redoubling is one of usury’s characteristics. The interest of a loan that starts with 10%, the second year is increased to 21%, the following year to 33% and with time passes the value of the loan itself. The second prohibition of usury was done with the following verses.

O believers! Fear Allah! If you are of the believers relinquish what remains (due) from usury. If you do not do it, then you are in war with Allah and His Messenger. If you repent, then you keep your capital. Neither will you suffer injustice, nor will you be made to suffer injustice. If the debtor is difficulty, then let there be postponement until he is in ease.  And it is better for you to that you remit (it) as gifts. Only if you knew!…” (Al-Baqara/The Cow 2/278-280)

      In the Ignorance Period the loan taker who was not able to pay back his loan was sold as slave. The last mentioned verse not only prohibited the selling of indebted people as slaves, bur foresaw the prolongation of the predicted period[1].

      Usury is the incoming obtained from a loan. The increase, the riba obtained from the loan is usury, due to the fact it is the economic deal it relies on. In a verse revealed in Mecca the Glorified Allah commands:

وما آتيتم من ربا ليربو في أموال الناس فلا يربو عند الله
وما آتيتم من زكاة تري دون وجه الله فأولئك هم المضعفون

      No one besides those who posses more capital than they need can give loans. Loans with usury interest are given “so that it may increase in the property of men…”. For this reason they cannot be given to people who maintain little property.

      The person who offers loans with usury in order to be assured that he will get back his money and the usury percentage requires guarantee. Thus he releases himself from the risk of guarding his capital. The reasons that make a loan-taker to overtake the usury difficulty might be his desire to increase his capital or the urgent need for money.

      Considered similar to the rent income, usury is defined as the ‘value of money in time’.  The rent for a property is the monetary compensation for the benefiting from a property without consuming it. Those who rent a house, sit in it. Those who rent a car, drive it. The property is given back to its owner when the agreement between the two sides ends. No property which cannot be benefited from without consuming it can possibly be rented. For example, money itself cannot possibly meet any necessity. Even if he were the owner of an enormous treasure, a man would die if he wasn’t fed. Money can be neither his food nor even his shelter. In order to profit out of money you have to exchange it with goods or services by consuming it. Thus, such a property cannot be rented and following the non-rentable property does not maintain a ‘value in time’.

      Usury loaners maintain that someone who is need today may happen to make money in the future. Someone else might assure money he is not able to use for the moment. If usury is allowed, the loan-giver would help the person in necessity hoping to gain more money. While the loan-taker would generously pay back his loan when obtaining his money. Thus, money would not be absurdly preserved, and both sides would profit out of it.

      The clause ‘whatever you lay out as usury, so that it may increase in the property of men, it shall not increase for Allah…’ means that ‘capital and money does not increase 

according to the natural order –fitrat- of the market as the loan is no economic deal pursued to increase the incoming. Income is achieved by the investment of the loan by the loan-taker. Loan is no investment. The usury dealer overtakes no responsibility in the investment of the loan, so he possesses no right in the possible income made out of this investment.

      Usury is mostly considered similar to trade. If the selling of a good, which costs 10$ in cash at the moment, for 11$ in a month credit is acceptable, then the selling of 10$ for 11$ in a month’s time is acceptable as well. On the contrary, trade is the exchanging of two different goods, as the offering of money to buy bread is. It might be in cash or in trust/ credit. On the other hand, the usury deal is the profiting of income out of a loan. The profiting of income from a loan is totally different from trade. This issue will be analyzed in a different chapter.

      Usury is always done with the same method. The Arabs living in the Arabic peninsula before the revelation of Islam are called the Arabs of the Ignorance Period. They gave loans without using their main capital and in order to obtain an income out of the given loan. When the agreed period was over, they asked for their loan and the interest. If the loan-taker could not pay his loan, a new interest was asked for the prolonged period.    

      If the loan was the result of credit purchase the owing person was asked if he would pay or if he wanted to increase. If he was not able to pay the loan amount was increased for a new future payment timEe  The Messenger of Allah in his Farewell Speech emphasizes:

وربا الجاهلية موضو ع. وأول ربا أضعه ربانا ربا عباس

بن عبد المطلب، فإنه موضوع كل ه.

“The usury of ignorance (period) has been removed. The first interest I removed was our interest, Abbas b. Abdulmuttalib’s interest. It has been entirely removed. ”

      The Ignorance Period usury is the same as the usury today; the income is provided by the loan. The listeners of the speech being witnesses of the Ignorance Period needed no explanation for the expression ‘ignorance usury’.

According to the following verse usury is the offering of a conditioned loan, which is paid back with interest.

“…If you repent, then you keep your capital. Neither will you make (others) suffer injustice, nor will you be made to suffer injustice. (Al-Baqara/The Cow 2/279)

      Capital is the term used to define the object or amount given in loan. Trade is the exchange of two different things so it cannot be defined as capital. If something is offered to be paid back with interest, the interest is usury. The following verse clarifies that usury is produced as a result of the loan as an economic deal. 

“If the debtor is difficulty, then let there be postponement until he is in ease.  And it is better for you that you remit (it) as gifts. Only if you knew.” (Al-Baqara/The Cow 2/280).

      According to the account the Messenger of Allah claimed as following. Ibn Abbas said that Usame bin Zeyd let him know that the Messenger of Allah claimed.

(إنما الربا في الدي ن)

“Usury is produced only from the loan.”

(لا ربا فيما كان يدا بي د)

“There is no usury in instant (cash) payments.”

(إنما الربا في النسيئ ة.)

Credited payments do include usuy.

      Another word of the Messenger of Allah has been reported to be as following:

(لا ربا إلا في النسيئة)

Usury is only when the loan has been credited. 

      The verses and hadiths clearly demonstrate that usury is the incoming assured through loan.