Loans

Qur'anic law does not allow followers of Islam to either earn interest or pay interest.  This presents some real challenges to people in the Middle East as they continue to participate more and more with the rest of the world economically.  Stock exchanges and people who invest in stock have to be very careful that they are neither earning interest nor gambling (another forbidden activity).  On a personal level, individuals cannot earn interest on their bank accounts and they cannot take out interest-earning loans.  They also cannot carry a balance on a credit card which would require them to pay interest.

My Arabic teacher described for us an ingenious system that has developed to work around these requirements and still obtain large lump sums for various necessities.  In her case, she needed money to pay her children's tuition.  At many places of work, and in nearly every neighborhood, people band together to form 'associations'.  They agree on a person to act as mediator and make monthly payments for a specified term.  Each month, every member of the association pays their agreed upon sum to the mediator.  The mediator then selects one member to receive all of the money for that month.  Members can request their payment for specific months, or they can just wait their turn for their payment.  In my teacher's case, she joined an association a month before school started and requested her payment for the first month of school.  The tuition being paid, she then continues to make her monthly payment for the term of the association so that all the other members can receive their lump sum in turn.  This device accomplishes the two goals of receiving a lump sum of money when needed and not having to pay interest to obtain it.

The other students and I admired the cleverness of this system, but we also wondered what the problem was with interest.  Apparently the prophet Muhammad has stated that paying interest is a worse sin than murder, stealing, and adultery.  Our teacher explained that while these other sins harm the doer of the act and the one it is being done to, paying interest is a sin that affects the whole community.  While I personally think that all of these things harm the whole community in some way, there is no doubt that many of our current world-wide economic woes can be attributed at least in part to the pervasive harm of usury.

I find myself often frustrated with the way of thinking here in Egypt that finds the reasons for doing everything from the Qur'an and the life of the prophet Muhammad.  There is very little evidence of critical thinking skills in most people's lives- they do the things they do because that is what their religion teaches, from how to conduct a government down to what oil is the best remedy for skin afflictions.  But in this instance of dealing with usury, I admire the way people have adapted.  It would be unreasonable for us in the West to forgo all interest payments completely, but it probably would not hurt for us to reflect on the harm that has come from our current system!