True IslamTrue Islam

True Islam

Seeking Clarity on Islam? Answered Here!

Why do Muslims avoid interest in financial transactions?


Why Do Muslims Avoid Interest in Financial Transactions?

Islamic Perspective on Interest (Riba)

In Islam, the concept of interest, known as Riba, is strictly prohibited. This prohibition is rooted in the Quran and the teachings of the Prophet Muhammad (peace be upon him). The Quran explicitly mentions the prohibition of Riba in several verses:

  • Surah Al-Baqarah (2:275): "Those who consume interest cannot stand [on the Day of Resurrection] except as one stands who is being beaten by Satan into insanity. That is because they say, 'Trade is [just] like interest.' But Allah has permitted trade and has forbidden interest."
  • Surah Al-Baqarah (2:278-279): "O you who have believed, fear Allah and give up what remains [due to you] of interest, if you should be believers. And if you do not, then be informed of a war [against you] from Allah and His Messenger."

Ethical and Moral Reasons

  1. Exploitation Prevention: Interest-based transactions often lead to the exploitation of the poor and needy. By prohibiting interest, Islam aims to create a more equitable financial system where wealth is not concentrated in the hands of a few.

  2. Social Justice: The prohibition of Riba promotes social justice and economic fairness. It encourages Muslims to engage in trade and investment that benefit the community as a whole.

  3. Encouragement of Risk-Sharing: Islamic finance encourages risk-sharing and partnership-based transactions. This fosters a sense of cooperation and mutual benefit, as opposed to the risk-free profit guaranteed by interest.

Comparison with Other Religions

  • Christianity: The Bible also contains passages that criticize the practice of charging interest. For example, in Exodus 22:25, it is stated, "If you lend money to one of my people among you who is needy, do not treat it like a business deal; charge no interest."
  • Judaism: The Torah also prohibits charging interest to fellow Jews. In Deuteronomy 23:19, it says, "Do not charge a fellow Israelite interest, whether on money or food or anything else that may earn interest."

Modern Implications

In today's world, Islamic finance has developed various interest-free financial products and services. These include profit-sharing investments, leasing, and joint ventures. These alternatives not only comply with Islamic principles but also offer ethical and sustainable financial solutions.


The prohibition of interest in Islam is not just a religious directive but also a means to promote economic justice, social equity, and ethical financial practices. By adhering to these principles, Muslims aim to create a fairer and more just society.


  • The Quran
  • The Bible (Old Testament and New Testament)

I hope this explanation helps you understand why Muslims avoid interest in financial transactions. If you have any more questions, feel free to ask!


out of


True Islam - Explore with Open Hearts | Product Hunt