Islam is extremely strict in
its prohibition of interest (Riba.) Riba is an unfair, unearned, and undeserved
income which is usually used to denote business transactions like money lending
or credit. Muslims argue that Riba is at the heart of most of the ills of the
modern economic system. Islamic economics proposes that instead of interest, a
more fair approach would involve profit sharing; that is, in which both parties
gain a proportional income depending on the investment or business in question.
One of the main points in
favor of the prohibition on interest is that economic activities become focused
on actual entrepreneurship, trade, and production, rather than in artificial
manipulations of interest rates. This has been one of the main problems of
modern capitalism, resulting in several bubbles that have contributed to
several market crashes. These impact society negatively both directly and
indirectly.
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