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- Title
Why Murabaha (Cost-plus Finance) Is Allowed Whereas Lending On Interest Is Prohibited In Islam?
- Authors
Ahmad, Syed Zahid
- Abstract
Opponents of ban on interest have been accusing Murabaha, the Shariah approved methodology of trade from the earliest times to be no different from earning interest. They also viewed earning through trade to the quite similar to lending on interest and dubbed trade as usury. However the Holy Quran has repeatedly expressed in forceful terms against the practice of Riba and permitted trade. The article has limelighted twelve particular differences between loan on interest and Murabaha. It has also illustrated the economic advantages of cost plus finance over lending on interest. It has also enumerated several other advantages of the system.
- Subjects
MURABAHAH; COST-plus pricing; INTEREST rates; INTEREST (Islamic law); QUR'AN; LIQUIDITY (Economics)
- Publication
Journal of Islamic Banking & Finance, 2013, Vol 30, Issue 1, p19
- ISSN
1814-8042
- Publication type
Article