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MsoNormal'> The unavoidable immediate implication of the Verse 2: 275 is that debt-creating financing is permissible and recognized in Shari’ah. While the verse condemns Interest-based lending and prohibits any increment on it, thus rendering loan giving a non-profitable activity and shifting it from business arena to personal spheres; it approves a kind of sale that fulfills the same objectives including giving a reward for the time value of the sold commodity (rather than money lent). In other words, this Verse establishes a very important rule that:

4 Some may argue that even cash sale is similar to interest lending from the point of view that profit is an increment like interest. This kind of similarity seems very simplistic because of two reasons: 1) sale may involve a loss too but lending does not; and 2) profit is commodity/market-based while interest is time-based. And I may add that those who argue for such a similarity do not deny that the permissibility in the verse refers to both cash sale and deferred-payment sale.

Debt-creating financing is an acceptable and rewarding business activity at the same time that it prohibits Riba (interest).

The similarities between deferred payment sale at a higher than the cash price and interest lending are apparent and include: 1) the purchaser gets the asset/goods at the time of the contract and pays later; 2) the amount she may end up paying is about the same; 3) the seller gets compensated for the time span between the contract and the maturity of the debt; and, 4) a debt is created. But the dissimilarities are not so clear and the Verse did not elaborate on them.

Objectives of the prohibition of interest

I argue that understanding the differences between interest lending and debt-creating sale financing is extremely essential to comprehend the objectives of the prohibition of Riba (interest) because it deals with the crucial point of the distinction between seemingly similar contracts.

The basic difference between interest financing and Islamic financing is that interest financing is done in a loan contract that postulates that a debt may be assigned increment while in reality a debt can’t produce any increment. This is the ideological basis for the prohibition that is consistent with the characteristic of realism in Shari’ah. The implications of accepting a debt to have increment are: 1) you need another unrealistic assumption about the valuation of the increment, the rate of interest. This has been done by creating an artificial market for exchanging debts that is built in fact on pure speculation and purely speculative market is, unlike markets of assets, goods and services, very volatile by their nature; 2) once you allow debts to have an increment you will have to allow it to be rescheduled with increment and you will have to allow discounting with a 本论文由英语论文网提供整理，提供论文代写，英语论文代写，代写论文，代写英语论文，代写留学生论文，代写英文论文，留学生论文代写相关核心关键词搜索。