The Islamic Perspective on Interest and Trade: Quranic Verses and Arguments

Interest is prohibited in Islam because it is a form of injustice and exploitation. Allah says in the Quran: 

“O you who have believed, do not consume interest, doubled and multiplied, but fear Allah that you may be successful.” (Quran 3:130)

Interest creates a gap between the rich and the poor, and leads to social unrest and instability. Allah says: 

“That which you give as interest to increase the people’s wealth does not increase with Allah; but that which you give in charity, seeking Allah’s Countenance, does increase manifold.” (Quran 30:39) 

Even if the lender and the borrower agree on a rate of interest, it is still forbidden in Islam. The Quran does not make any distinction between high or low interest, or between beneficial or harmful loans. The Quran condemns all forms of interest as a grave sin. Allah says: 

“Those who consume interest cannot stand [on the Day of Resurrection] except as one stands who is being beaten by Satan into insanity. That is because they say, "Trade is [just] like interest." But Allah has permitted trade and has forbidden interest. So whoever has received an admonition from his Lord and desists may have what is past, and his affair rests with Allah. But whoever returns to [dealing in interest or usury] - those are the companions of the Fire; they will abide eternally therein.” (Quran 2:275) 

 Trade and interest are not comparable in Islam. Trade is a lawful and ethical way of earning income, while interest is an unlawful and unethical way of increasing wealth. Trade involves mutual benefit and consent, while interest involves exploitation and coercion. Trade involves productive activity and social responsibility, while interest involves idle accumulation and selfish greed. Allah says: “Allah has permitted trade and has forbidden interest.” (Quran 2:275)