Why riba is prohibited in Islam
In the Holy Quran, Allah (SWT) tells us to not engage in interest-based transactions or investments: “O you who believe! Fear Allah and give up what remains [due to you] of interest, if you are true believers.” (2:278)
Large amounts of interest can cause debt and financial insecurity, particularly exploiting those on low incomes or without financial safety nets. Instead, Muslims are encouraged to partake in non-interest-based giving, charity and long-term investments that can benefit others, like Sadaqah Jariyah projects. Interest-free loans are also a preferred alternative to interest-bearing loans or personal loan contracts that involve riba, as interest-free loans do not promote interest or exploitative gain.