Online from: 1989
Subject Area: Economics
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|Title:||Why is interest prohibited in Islam? A statistical justification|
|Author(s):||Mohammad Zakir Hossain, (College of Commerce and Economics, Sultan Qaboos University, Muscat, Oman)|
|Citation:||Mohammad Zakir Hossain, (2009) "Why is interest prohibited in Islam? A statistical justification", Humanomics, Vol. 25 Iss: 4, pp.241 - 253|
|Keywords:||Interest, Islam, Profit, Trade|
|Article type:||Conceptual paper|
|DOI:||10.1108/08288660910997610 (Permanent URL)|
|Publisher:||Emerald Group Publishing Limited|
Purpose – The purpose of this paper is to present an analytical justification from statistical view point about why Islam has strictly forbidden interest for the humankind.
Design/methodology/approach – It is a theoretical paper that looks into analytical views of justification in order to investigate the motivation of prohibiting interest.
Findings – The results of the paper suggest that interest has a great negative impact on the society, economy and morality of human beings. Analysis found some solid reasons which proved that interest has been really an evil system for the humankind and society as a whole for all times in the history of civilizations. On the other hand, from the statistical information given in the paper it was found that interest-free financial institutions have been very successful in terms of their deposit, investment, foreign exchange business, financial stability and popularity as compared to the interest based financial institutions.
Research limitations/implications – The impact of interest-free financial institutions in development financing and in establishing sustainability of a welfare community remains a potential problem due to our shortage and/or lack of proper knowledge.
Practical implications – It is, therefore, very important to be aware of the exact stance of Islam on interest first. Then more extensive networking and complementary relations are needed among the financial and socio-economic development goals in accordance with the tenets of the Islamic Shariah.
Originality/value – The paper shows its originality in substance and makes a unique contribution to the literature on systems and ethics.
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