Did Prophet Muhammad (SAW) Permit 100% Interest Rate? A Rejoinder

By Bello Sani Yahuza

“He who talks on a matter out of his profession comes with surprises” – Ibn Hajar (d. 852AH/1449CE) It has never been an issue for a person to have a keen interest in any field of study. But it is an outlandish the way things are going and the way people quickly assume expertise on a subject matter that are not familiar with.

They instead, come up with a lot of chaos, contradictions and confusion. So, I came across an article, written by one personality called Ali Abubakar Sadiq, a journalist by profession who claims deep knowledge of the Principles of Islamic Jurisprudence where he delves into a delicate and intricate issue of Riba (interest).

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Sadiq alleges that the Prophet Muhammad SAW has permitted a 100% interest rate. So, instead of a solution, he brings more confusion to rather known and well define the concept of Riba in the classical juristic theories and its application in the modern banking system.

But, beyond this, the writer creates a world of surprises. In fact, if there is an 8th wonder of the world, I am sure his writing could be the one. I, therefore, write these lines, in order to at least address some of these surprising confusions.

I intend to address some technical questions regarding the subject matter. For instance, is it really the Prophet (PBUH) permitted interest? what really interest is? What and what constitutes interest (al-had)? What is the Dhabid of understanding interest? What is the effective cause of and what is the wisdom/Maqasid of prohibiting interest?

In sha Allah, I will address these questions along the following surprises itemized based on their importance to the subject matter:

1. The Prophet SAW Accepted Interest: Beyond just surprise, it is rather dangerous to claim that the Prophet (SAW) accepted interest. It can even be sacrilegious. I never read or heard a modernist or an orientalist proclaiming that the Prophet himself accepted and transacted in interest. Had this happen, that could be contradictory, I mean how can Prophet Muhammad SAW prohibits something and practiced it. The legal maxim upholds that, “Prohibition of an issue is by default an enjoinment of its opposite”.
2. This terminology by jurists fits this context well. Besides, the condemnation of interest in the Qur’anic verses are explicitly clear that, Allah even declare war against devourer of interest (Qur’an 2:179). In another verse He says that the devourers of interest will raise in the day of resurrection in a condition of those beaten by Satan leading him to madness (2:275). Another point is how does the writer reconcile his claim with the verse that says, …and Allah has permitted trade and forbidden interest (riba) “الراب وحرم البيع هللا وأحل .” Qur’an as a legal document and a book of guidance, has unique, distinct, and miraculous style. It is full of laws and principles with a well-defined science of interpretation, in addition to commentaries and exegeses. One cannot interpret it relying upon his weak understanding of the language. Besides, English Qur’anic translated versions like Yusuf Ali and others are not enough to make a person understands the deeper meanings of its verses with their implications. Just as one cannot interpret the constitution of the Federal Republic of Nigeria even if he is what William Shakespeare is to English literature. Only an established court of law can do that.
3. The only Interest/Riba Prohibited is above 100% Another surprise by the writer is his claim that interest which is not more than 100% is permitted by the Noble Qur’an. The writer builds his novice interpretation of Allah’s saying: “O believers, take not doubled and redoubled interest, and fear Allah so that you may prosper.” (Qur’an 3:130). With this weak, unprecedented interpretation, the writer further exposes his unfamiliarity of what he claims to know. Going by number, how would Qur’an permit 100% interest and forbids something above it? And by volume, does one cup of wine has any difference to two cups, or does stealing ₦100 has any difference to ₦200.
4. It does not make sense, and that is ridiculous! Simply, the verse prohibited double interest which is 100% and redouble which is more than 100%. Going by the writer’s assertion, how and where does the writer get the permission of 100%? I mean, where does that state in the verse? 3. Riba, Profit, and Gift (Ihsan) Another point the writer seems to lack knowledge of is these three concepts. All of riba, profit, and gift (Ihsan) can come as an increase in repayment, his confusion in understanding the subject matter led him to falsely assume they are the same and equal, and so he messed up with them in his writing. Citing Jabir bin ‘Abdullah’s narration in Sahih al-Bukhari, Vol. 3, No. 579, in which the Prophet repaid him the debt he owed him with an extra amount as evidence for interest.
5. This is clear misunderstanding of the case. This is not interest, had the writer, instead of assuming knowledge, referred himself to the scholars’ interpretation of the hadith, he would have understood it. The Qur’an says: “But if they had referred it back to the Messenger or to those of authority among them, then the ones who can draw correct conclusions from it would have known about it” (Qur’an 4:83). So, interest is clearly prohibited whereas, the other two are allowed. More so, debt on its own is not, and will never be a mechanism for profit-making in Islam. The trajectories of interest, profit, and gift and how they can interchange in a transaction are dynamic.
6. Interest is a predetermine unjustified increment which promotes exploitation of the giver upon the receiver of the loan. Giving out loan does not make the money increase. Qur’an says: “That which you give as interest to increase the people’s’ wealth increases not with Allah; but that which you give in charity, seeking the goodwill of Allah, multiplies in manifold.” (Qur’an 30: 39). Paradoxically, profit is a justified return or earning upon which all economic and financial transactions are based. While gift is an act of benevolence (Ihsan). So, in essence, giving loans stipulating an increase in the debt agreement is interest, while selling a commodity with the same increase is profit and any addition of both the two instances without stipulating any condition to it, is a gift (Ihsan). As in hadith he cited, “when he (the Prophet) repaid the loan of a camel giving two back (Muwatta Kitab al-Buyu hadith 1346),
7. Money and Commodity A very basic knowledge of Islamic finance can help one to know that in Islamic law, there is a world of difference between money and commodity. The writer quoted out of context one tradition in Sahih Muslim of Prophet giving a better-quality camel than the original one.
8. In Shari’ah, a side of being a recognizable unit of account and means of payment for goods and services, money, has no intrinsic value. Money is only viewed as a mechanism for facilitating trade. A ₦100 notes for instance, a side of being a legal tender in Nigeria, one can hardly draw any benefit from it, and the moment that quality preserved by law is removed it becomes nothing.

All the old paper currencies and coins after they were abolished by law of the land, they are as good as trash. But the commodity on the other hand, has intrinsic value, this means a real economic value. So, naturally one can benefit from food, cloth, shelter by eating, waring, privacy etc.

The implication of that from the jurisprudential perspective is that, one cannot buy and sell money on credit and add anything above the principal. Any increment is interest. The legal maxim says “any loan returns with benefit is interest”. Simply put it, Islam approves Time value in commodity transaction, but prohibits time value of money (TVM).

To really understand the concept of Riba in the Islamic jurisprudence, one must know the difference between money and commodity, it is one major yardstick and fantastic point of difference between Islam and the interest-based systems.

5. Collateral as Riba Again, another surprise here, the writer claims that taking collateral in giving loans is also an interest. Citing another narration out of context on Prophet’s taking grain from a Jew on credit and giving him collaterally.

The question is how does the collateral in this contract stand as riba? Then, why the Jew had to return back the collateral when the debt was repaid?

A clear contradiction and confusion! Collateral is separate rule in the Islamic commercial transaction.

Let the writer refer to Qur’an 2: 282, to know the rules related to collateral.

6. The Definition of Riba The writer here claims that the definition of interest is given in the Noble Qur’an when Allah says “Do not devour riba double and redouble” Qur’an 3:130. This verse does not define interest at all. Rather, it explains one scope, an aspect, and a dimension of interest. Why? because, the cultural context and the prevailing economic system in the Arabia during revelation is that, riba is well known by all and sundry.

The known maxim says: “A known matter does not need definition”. Interest is so pervasive that everybody was transacting in it. Perhaps, this is part of the wisdom of its gradual revelation and prohibition. So, let the writer refer to the gradual legislation of interest in the Qur’an.

7. Riba and Mutual Consent The writer says “There is nothing in the Quran or Hadith that prohibits the pre-fixing of the rate of return, as long as it occurs with the mutual consent of the parties and doesn’t exceed 100%, since the prophet’s payment of two camels for one is 100% interest”. Another glaring misconception! When, where and how the mutual consent of the parties constitutes a source of law in Shari’ah? Or when does it make permitted what is prohibited? I need an answer to this please!

8. Originality The technical aspect of the writing is another drawback of the writing. Apart from verses and hadith he cited; the writer uses most of the writings which are from the secondary sources. The writer claims ownership as if he is the original writer of the issues. He did not acknowledge his sources which some of them are just copied and paste from online internet sources such as Wikipedia and so on.

The arguments made by the modernists and orientalists like Muhammad Akram Khan, Timur Kuran, Muhammad Omar Faruq who use TVM, inflation, and so on to defend the banking interest.

Other scholars who are moved by political fatwas such as Sheikh Tantawi and other scholars from Egypt, their fatwa is controversial not accepted even in Al-Azhar.

Another aspect I find also, apart from modernists’ argument on interest, the writer’s claim on Jassas as the first to interpret interest as all increase, Ottoman’s dealing with interest and historical narration of legalizing interest, these and many others, are not acknowledged. Most of them are copied from Wikipedia (source – https://en.wikipedia.org/wiki/Riba#Non-orthodox_approach).

You can see, getting access to information source does not make a person knowledgeable of the subject matter.

10. Warning My advice to the writer is to call his attention that while knowledge is never a monopoly of anybody, but it has its own standard, discipline, and decorum anybody must adhere to. And while, one will never claim to know everything, the jack of all trade will always be a master of none.

Allah The Almighty says: “You have given all of the knowledge but a little”. That is why professionalism is very important and every person should follow his own profession. Nevertheless, no one is denied the benefit of having an interest in any particular field of study.

But that aspect should be handled with maturity and respect of the discipline.

10. Admonition, In conclusion, the entirety of religion is based on admonition (Nasihah). My first and foremost admonition to the writer is to quickly repent from alleging the Prophet of accepting riba.

It is a grievous sin to falsely attribute something to Allah or to His Messenger. Some scholars rank it equal with the association (shirk) or more grievous than shirk.

I also call him to withdraw his claim and adopt the authentic view accepted by the Muslims ummah. The Prophet says: “My nation will never unite on falsehood” You cannot fault the Ummah in its entirety but, individuals cannot be certain of their personal views.

Bello Sani Yahuza bellokano2000@gmail.com  International Islamic University, Gombak, Malaysia. 14/07/2020