certifired_img

Books and Documents

Islam and the West (05 Nov 2019 NewAgeIslam.Com)



‘Necessity Legalises the Prohibited’: How Muslims Navigate Sharia Financing When Interest Is Haram


By Faima Bakar

3 Nov 2019

‘I didn’t take out a loan for my masters because it’s Haram so I planned to save up my salary to pay it off,’ explains Muslim writer Rabbil. ‘It didn’t go well because of rent and bills. I was just struggling already. My family had to step in which I was embarrassed by.’ Like Rabbil, many Muslims hoping to get an education face a dilemma – to take out or not to take out a student loan. You might not be aware but for Muslims, interest is Haram (forbidden). Any loans that require repayment with interest added on are not permissible. This is because in Islam money has no intrinsic value – it’s just a medium of exchange. That means Muslims have to work for money to attach its value. Simply lending and borrowing money doesn’t count as ‘work’. So taking out a loan and incurring interest on it is considered impermissible – because the bank (or person lending) hasn’t ‘worked’ to earn extra payment. The limitations put on borrowing can stop students from pursuing university altogether. Those who still choose to study via halal means, such as borrowing money from their loved ones, can end up in large amounts of debt.

For teacher Faisa, despite knowing the difficulties of self-funding her degree, going against Islamic principles was not an option. ‘I knew from early on that I didn’t want to take a loan,’ she tells Metro.co.uk. ‘When the £9,000 fees were announced during my second year of the sixth form, I thought “That’s it. University isn’t for me”. ‘I believe that interest is Haram and I wasn’t willing to listen to anything else. That didn’t go well with my parents who were adamant that I had the higher education they never had.’ As a necessity, Faisa applied for a student loan to cover her first-year fees and also got a maintenance grant which did not need to be paid back. She didn’t apply for the maintenance loan, however, as it needs to be paid back with interest. ‘In second year, I basically saved every penny of the grant (plus I was entitled to a university grant too),’ she explains. ‘I worked as a private tutor, and luckily had some financial help from the Danish government (since I’m a citizen and they pay for you to go university). ‘I managed to make up almost all of the fees for second and third year this way but I’m still in debt.’ Having to worry about paying these fees without relying on a loans company negatively affected her quality of life. ‘It was really difficult but I realise I’m in a lot less debt than many of my peers,’ Faisa tells us. ‘Also, I was constantly broke as a student and never, ever did anything remotely fun. ‘I was always felt too guilty if I spent any money on myself.’ While she doesn’t have to pay back the Danish government, Faisa is still indebted to the Student Loans Company for her first year.

At the moment, the UK government doesn’t offer a system where a Halal student loan can be taken out. A Halal student loan system could allow Muslim students to take out a loan but make charitable contributions rather than paying interest back. While that’s being discussed, some Muslims are missing out. Like Faisa, Masuda also had to weigh her options when it came to Halal financing. She’d planned to raise the money needed to cover her tuition fees. ‘I tried but ultimately failed,’ she tells Metro.co.uk. ‘I took a gap year [to raise money] but I got so comfortable in working I didn’t return. ‘However, I do have hopes and plans to go one day. I now work at a school and I do speech and language however to progress further I need that degree so the plan is to go back.’ She’s not sure how she’s going to afford university when the time comes but doesn’t plan on taking out a non-Sharia-compliant loan. She’s hoping that some help will be available to her.

Without Sharia-compliant loans, Muslim students often have to plan meticulously, stashing away their time and money for years to afford an education. Technological officer Imad tells us: ‘I did some calculations and modelled it on Excel. I researched and estimated what my income would be based on receiving a maintenance grant, a yearly grant from King’s College and working part-time. I also estimated my outgoings which were inevitably less due to the choice to live at home and stay in London to study. ‘Those were my initial calculations which allowed me to break even. ‘Beyond that point, I knew having a part-time job along and hopefully securing one or two internships would provide me with the extra income that I could use for my outgoings outside of the core fees.’ He adds that it was stressful having to live scrupulously and scrape up enough to pay each installment in time. Despite the pressure, he is unmoving in his position on accepting loans. ‘My cultural upbringing along with religious teachings strongly recommended the avoidance of debt,’ says Imad.

While some believe that student loans are impermissible, others say that ‘necessity legalises the prohibited’. In other words, it’s unlikely that a person will be able to afford extortionate tuition fees for an education that is required for many jobs. Others also argue that the student loan is unlike any other and doesn’t go against Riba (or usury – lending money at unreasonably high rates of interest). The conditions of a student loan – that it’s written off after 30 years, cancelled in case of debt and disability and paid only after earning £21,000 a year – make it different to others, say some. All these things may indicate that such loans are not a standard loan, which is shunned by Islamic jurists and therefore may be allowed. While the conversation is happening, many Muslims will agree that a government-led system would make the decision a lot easier to make. Otherwise many bright followers of the Islamic faith will be prevented from accomplishing their educational goals.

Original Headline: My halal student debt: How Muslims navigate Sharia financing when interest is Haram

Source: Metro, UK

URL: http://www.newageislam.com/islam-and-the-west/faima-bakar/‘necessity-legalises-the-prohibited’--how-muslims-navigate-sharia-financing-when-interest-is-haram/d/120179




TOTAL COMMENTS:-   4


  • Should any Muslim Imam or Muslim bank officers or whatever ignore the outcries of Muslims who wish to apply for student loans yet find hard to finance themselves to proceed to universities for further studies?
    According to the website, https://www.britannica.com/topic/Shariah/Penal-law   , under the 2nd paragraph of law of transactions, it mentions 'The doctrine of riba significantly influences the Islamic law of tansactions.  Basically, this is the prohibition of usury.'  As proven previously student loan, according to Quran, should not be considered as usury, since it is not buying or selling thing but financing.  Besides, the usury in hadith is meant for good to good in exchange, such as gold to gold in exchange, wheat grain to wheat grain exchange, or etc., yet student loan gets loan contract in different source.  Thus, as there are different sources of nature, none should treat student loan as usury.
    Ad-Duha (The Forenoon - After Sunrise) - 93:10  [read in context]
    وَأَمَّا السَّائِلَ فَلَا تَنْهَرْ (93:10)
    Basit -   Hussari -   Minshawi -  f
    Waamma alssaila fala tanhar
    Topics discussed in this Verse:
    [Charity [zakah]]
    and him that seeks [thy] help shalt thou never chide, [4] - 93:10 (Asad) - 
    The phrase, him that seeks thy help shall thou never chide, here can mean Muslims who are in poverty in need of money to finance their study loans seek help from Imam or anybody else so that they can assist them to call banks to release their rules to enable them to be able to borrow money from them must not be angry with them or should not chide with them.
    Quran 5:2 demands Imam or bank officers or whatever to assist these Muslims who are in need of fund to get student loans to seek help from banks so as to enable them to be able to get the funds to finance their further studies.
    Al-Ma'idah (The Table Spread) - 5:2  [read in context]
    يَا أَيُّهَا الَّذِينَ آمَنُواْ لاَ تُحِلُّواْ شَعَآئِرَ اللّهِ وَلاَ الشَّهْرَ الْحَرَامَ وَلاَ الْهَدْيَ وَلاَ الْقَلآئِدَ وَلا آمِّينَ الْبَيْتَ الْحَرَامَ يَبْتَغُونَ فَضْلاً مِّن رَّبِّهِمْ وَرِضْوَانًا وَإِذَا حَلَلْتُمْ فَاصْطَادُواْ وَلاَ يَجْرِمَنَّكُمْ شَنَآنُ قَوْمٍ أَن صَدُّوكُمْ عَنِ الْمَسْجِدِ الْحَرَامِ أَن تَعْتَدُواْ وَتَعَاوَنُواْ عَلَى الْبرِّ وَالتَّقْوَى وَلاَ تَعَاوَنُواْ عَلَى الإِثْمِ وَالْعُدْوَانِ وَاتَّقُواْ اللّهَ إِنَّ اللّهَ شَدِيدُ الْعِقَابِ (5:2)
    Basit -   Hussari -   Minshawi -  f
    Ya ayyuha allatheena amanoo la tuhilloo shaAAaira Allahi wala alshshahra alharama wala alhadya wala alqalaida wala ammeena albayta alharama yabtaghoona fadlan min rabbihim waridwanan waitha halaltum faistadoo wala yajrimannakum shanaanu qawmin an saddookum AAani almasjidi alharami an taAAtadoo wataAAawanoo AAala albirri waalttaqwa wala taAAawanoo AAala alithmi waalAAudwani waittaqoo Allaha inna Allaha shadeedu alAAiqabi
    Topics discussed in this Verse:
    [Allah:seek sustenance from Him] [Allah's attributes:strict in punishment] [Hunting:forbidden during Pilgrimage] [Kabah] [Masjid al Haram] [Pilgrimage]
    O you who have attained to faith! Offend not against the symbols set up by God, nor against the sacred month [of pilgrimage], nor against the garlanded offerings, [4] nor against those who flock to the Inviolable Temple, seeking favour with their Sustainer and His goodly acceptance; and [only] after your pilgrimage is over [5] are you free to hunt. And never let your hatred of people who would bar you from the Inviolable House of Worship lead you into the sin of aggression: [6] but rather HELP one another in furthering virtue and God-consciousness, and do not help one another in furthering evil and enmity; and remain conscious of God: for, behold, God is severe in retribution! - 5:2 (Asad)-  
    The phrase, rather help one another in furthering virtue and God-consciousness, in Quran 5:2 demands Muslims to help the believers instead of ignoring the outcry of Muslims who are in poverty are in need of money to approach banks to get student loans to finance their studies.
    Thus, according to Quran, Muslims should enable the rules in the banks to assist the outcry of Muslims who need banks to finance their studies.  As Quran does not relate student loans to usury and it demands Muslims to help the needy, Islamic banks should ease the problem among Muslims who are in poverty to enable them for a way to get student loans.
    By zuma - 11/8/2019 6:25:18 PM



  • Sharia law always has conflicted with Quran and hadith.  The same is for usury.
    Al-Baqara (The Cow) - 2:275  [read in context]
    الَّذِينَ يَأْكُلُونَ الرِّبَا لاَ يَقُومُونَ إِلاَّ كَمَا يَقُومُ الَّذِي يَتَخَبَّطُهُ الشَّيْطَانُ مِنَ الْمَسِّ ذَلِكَ بِأَنَّهُمْ قَالُواْ إِنَّمَا الْبَيْعُ مِثْلُ الرِّبَا وَأَحَلَّ اللّهُ الْبَيْعَ وَحَرَّمَ الرِّبَا فَمَن جَاءهُ مَوْعِظَةٌ مِّن رَّبِّهِ فَانتَهَىَ فَلَهُ مَا سَلَفَ وَأَمْرُهُ إِلَى اللّهِ وَمَنْ عَادَ فَأُوْلَـئِكَ أَصْحَابُ النَّارِ هُمْ فِيهَا خَالِدُونَ (2:275)
    Basit -   Hussari -   Minshawi -  f
    Allatheena yakuloona alrriba la yaqoomoona illa kama yaqoomu allathee yatakhabbatuhu alshshaytanu mina almassi thalika biannahum qaloo innama albayAAu mithlu alrriba waahalla Allahu albayAAa waharrama alrriba faman jaahu mawAAithatun min rabbihi faintaha falahu ma salafa waamruhu ila Allahi waman AAada faolaika ashabu alnnari hum feeha khalidoona
    Topics discussed in this Verse:
    [Satan] [Trade] [Usury ( Interest Riba ):Usury]
    THOSE who gorge themselves on USURY [262] behave but as he might behave whom Satan has confounded with his touch; for they say, "Buying and selling is but a kind of [263] USURY" - the while God has made buying and selling lawful and USURY unlawful. Hence, whoever becomes aware of his Sustainer's admonition, [264] and thereupon desists [from usury], may keep his past gains, and it will be for God to judge him; but as for those who return to it -they are destined for the fire, therein to abide! - 2:275 (Asad) - 
    The phrase, Buying and selling is but a kind of usury, here implies the word, usury, in Quran refers to a kind of trading.  Can a student borrow money from bank with interest be considered as trading?  If no, how can the interest be paid by students to be bank to be considered as usury?
    Hadith supports the same that usury in hadith refers to good to exchange with the same type of good in charging interest or whatever.  The following is the extract:
    It was narrated that Malik bin Aws bin Hadathan Nasri said:
    "I heard 'Umar bin Al-Khattab say: 'The Messenger of Allah (ﷺ) said: "Exchanging gold for gold is usury unless it is done on the spot. (Exchanging) wheat for wheat is usury, unless it is done on the spot. (Exchanging) barley for barley is usury unless it is done on the spot. (Exchanging) dates for dates is usury, unless it is done on the spot."
    حَدَّثَنَا أَبُو بَكْرِ بْنُ أَبِي شَيْبَةَ، وَعَلِيُّ بْنُ مُحَمَّدٍ، وَهِشَامُ بْنُ عَمَّارٍ، وَنَصْرُ بْنُ عَلِيٍّ، وَمُحَمَّدُ بْنُ الصَّبَّاحِ، قَالُوا حَدَّثَنَا سُفْيَانُ بْنُ عُيَيْنَةَ، عَنِ الزُّهْرِيِّ، عَنْ مَالِكِ بْنِ أَوْسِ بْنِ الْحَدَثَانِ النَّصْرِيِّ، قَالَ سَمِعْتُ عُمَرَ بْنَ الْخَطَّابِ، يَقُولُ قَالَ رَسُولُ اللَّهِ ـ صلى الله عليه وسلم ـ ‏ "‏ الذَّهَبُ بِالذَّهَبِ رِبًا إِلاَّ هَاءَ وَهَاءَ وَالْبُرُّ بِالْبُرِّ رِبًا إِلاَّ هَاءَ وَهَاءَ وَالشَّعِيرُ بِالشَّعِيرِ رِبًا إِلاَّ هَاءَ وَهَاءَ وَالتَّمْرُ بِالتَّمْرِ رِبًا إِلاَّ هَاءَ وَهَاءَ ‏"‏ ‏.‏
    The extract above is from Sahih Darussalam, English reference: vol 3, book 12, hadith 2253, Arabic reference: book 12, hadith 2338.
    The phrase, Exchanging gold for gold is usury unless it is done on the spot, here implies the exchange of same type of item, i.e. gold, is considered to be usury unless it is done on the spot.  Or in other words, if the exchange of the same item of good has been done in different time or day, it is considered to be usury.  The subsequent phrase, Exchange  barley for barley is usury unless it is done on the spot, mentions the same that it forbids exchanging the same items of things.  In other words, if you buy gold bar to keep and then you exchange with another party with gold bar on the same day, it is usury.  Yet if you exchange gold bar and gold bar on the spot, it is not usury.  Now student apply for loan. It is in different issue.  The student gets the loan contract and gets money back.  As both loan contract and money are two different items, they should not be considered as usury, since both are different items.  The usury that hadith forbids is same item to same item exchange.  Yet student get loan contract and money back in assistance are in two different items.  Thus, there are two different issues.  Quran even mentions the word, usury, is meant for trading and yet what this student requests is not trading but financing.  It seems to be two different issues.
    The extracted hadith verse mentions the same that what hadith mentions about usury is the exchange of same item, i.e. gold to gold exchange, or wheat grain to wheat grain exchange or etc.
    Narrated Az-Zuhri from Malik bin Aus:
    That the latter said, "Who has change?" Talha said, "I (will have change) when our storekeeper comes from the forest." Malik bin Aus narrated from `Umar bin Al-Khattab: Allah's Messenger (ﷺ) said, "The bartering of gold for gold is Riba (usury), except if it is from hand to hand and equal in amount, and wheat grain for wheat grain is usury except if it is form hand to hand and equal in amount, and dates for dates is usury except if it is from hand to hand and equal in amount, and barley for barley is usury except if it is from hand to hand and equal in amount."
    حَدَّثَنَا عَلِيٌّ، حَدَّثَنَا سُفْيَانُ، كَانَ عَمْرُو بْنُ دِينَارٍ يُحَدِّثُهُ عَنِ الزُّهْرِيِّ، عَنْ مَالِكِ بْنِ أَوْسٍ، أَنَّهُ قَالَ مَنْ عِنْدَهُ صَرْفٌ فَقَالَ طَلْحَةُ أَنَا حَتَّى يَجِيءَ خَازِنُنَا مِنَ الْغَابَةِ‏.‏ قَالَ سُفْيَانُ هُوَ الَّذِي حَفِظْنَاهُ مِنَ الزُّهْرِيِّ لَيْسَ فِيهِ زِيَادَةٌ‏.‏ فَقَالَ أَخْبَرَنِي مَالِكُ بْنُ أَوْسٍ سَمِعَ عُمَرَ بْنَ الْخَطَّابِ ـ رضى الله عنه ـ يُخْبِرُ عَنْ رَسُولِ اللَّهِ صلى الله عليه وسلم قَالَ ‏ "‏ الذَّهَبُ بِالذَّهَبِ رِبًا إِلاَّ هَاءَ وَهَاءَ، وَالْبُرُّ بِالْبُرِّ رِبًا إِلاَّ هَاءَ وَهَاءَ، وَالتَّمْرُ بِالتَّمْرِ رِبًا إِلاَّ هَاءَ وَهَاءَ، وَالشَّعِيرُ بِالشَّعِيرِ رِبًا إِلاَّ هَاءَ وَهَاءَ ‏"‏‏.‏
    The extract above is from Sahih al-Bukhari 2134, in-book reference: book 34, hadith 86, USC-MSA web (English) reference: vol 3, book 34, hadith 344.
    The phrase, dates for dates is usury, here implies the same that it forbids the exchange of same item of good.  The subsequent phrase, except if it is from hand to hand and equal in amount, here implies it does not entirely forbid usury, unless the same amount of that item is given to another party,  In other words, if some gives a gold bar and you return him more than or less than a gold bar, it is usury, since you have given him different amount of gold bar.  If one insists that usury has to be applicable to student loan, Hadith permits him to borrow money from them and yet in return he pays back the same amount of money them.
    The following is the reason why it is irrational to link student loan to usury as mentioned in Quran and Hadith:
    First, Quran and hadith specifies usury is meant for the same item of good exchange, i.e. gold to gold, or wheat grain to wheat grain, or dates to dates or etc.  Student gets loan from bank.  They gets loan contract and money received from back.  As loan contract and money are different items, there is a query whether usury in Quran and hadith can be applicable to current days as student loan.
    Second, Quran mentions usury is for trading and yet student loan is financing.  As both are different issues, it seems that the concept of usury cannot be applicable to student loan.
    Third, Hadith does not forbids entirely usury with the same amount involved.  Yet contemporary Muslims forbids entirely usury.
    The extract below mentions the same that usury in hadith refers to good to good exchange and it permits usury if the same amount is involved in exchange:
    Narrated Ibn Shihab:
    that Malik bin Aus said, "I was in need of change for one-hundred Dinars. Talha bin 'Ubaidullah called me and we discussed the matter, and he agreed to change (my Dinars). He took the gold pieces in his hands and fidgeted with them, and then said, "Wait till my storekeeper comes from the forest." `Umar was listening to that and said, "By Allah! You should not separate from Talha till you get the money from him, for Allah's Messenger (ﷺ) said, 'The selling of gold for gold is Riba (usury) except if the exchange is from hand to hand and equal in amount, and similarly, the selling of wheat for wheat is Riba (usury) unless it is from hand to hand and equal in amount, and the selling of barley for barley is usury unless it is from hand to hand and equal in amount, and dates for dates, is usury unless it is from hand to hand and equal in amount"
    حَدَّثَنَا عَبْدُ اللَّهِ بْنُ يُوسُفَ، أَخْبَرَنَا مَالِكٌ، عَنِ ابْنِ شِهَابٍ، عَنْ مَالِكِ بْنِ أَوْسٍ، أَخْبَرَهُ أَنَّهُ الْتَمَسَ، صَرْفًا بِمِائَةِ دِينَارٍ، فَدَعَانِي طَلْحَةُ بْنُ عُبَيْدِ اللَّهِ فَتَرَاوَضْنَا، حَتَّى اصْطَرَفَ مِنِّي، فَأَخَذَ الذَّهَبَ يُقَلِّبُهَا فِي يَدِهِ، ثُمَّ قَالَ حَتَّى يَأْتِيَ خَازِنِي مِنَ الْغَابَةِ، وَعُمَرُ يَسْمَعُ ذَلِكَ، فَقَالَ وَاللَّهِ لاَ تُفَارِقُهُ حَتَّى تَأْخُذَ مِنْهُ، قَالَ رَسُولُ اللَّهِ صلى الله عليه وسلم ‏ "‏ الذَّهَبُ بِالذَّهَبِ رِبًا إِلاَّ هَاءَ وَهَاءَ، وَالْبُرُّ بِالْبُرِّ رِبًا إِلاَّ هَاءَ وَهَاءَ، وَالشَّعِيرُ بِالشَّعِيرِ رِبًا إِلاَّ هَاءَ وَهَاءَ، وَالتَّمْرُ بِالتَّمْرِ رِبًا إِلاَّ هَاءَ وَهَاءَ ‏"‏‏.‏
    The extract above is from Sahih al-Bukhari 2174, in-book reference: book 34, hadith 124, USC-MSA web (English) reference: vol 3, book 34, hadith 382.
    From the extracts above, it can conclude that student loan is nothing to do with usury, since usury as mentioned in Quran and Hadith refers to trading and yet student loan is financing.  There are of different sources.  Besides, student loan gets loan contract and money with different sources and what is mentioned in hadith for usury is same item of gold or dates or etc. in exchange.  There are of two different issues.  Even if some insist usury can refer to student loan, hadith permits it if same amount involved.  In other words, a student can borrow from bank $5,000 and return the same amount $5,000 later.  Yet Sharia law entirely forbids.  This proves again Sharia law is human made law and it contradicts against hadith and Quran.
    By Zuma - 11/6/2019 1:02:44 AM



  • most muslims make a fuss about riba but conveniently ignore that Islamic caliphate is basically a plunder economy based on raids on nonMuslims
    By Satishb - 11/6/2019 12:58:28 AM



  • Ordinary interest is not haram. Usurious interest is haram.

    By Ghulam Mohiyuddin - 11/5/2019 11:15:29 AM



Compose Your Comments here:
Name
Email (Not to be published)
Comments
Fill the text
 
Disclaimer: The opinions expressed in the articles and comments are the opinions of the authors and do not necessarily reflect that of NewAgeIslam.com.

Content