Lending money by rates or simply the usury

    I talked in two previous articles about “Ez-zakah” and I discussed the matter how to proceed the way to make an equality between people in their incomes. But the content was talking only about the cash sources to support the fund of this institution, because there are other sources are existing also to share them like we do with money and apply them too for the same purpose, like the agricultural crops yearly and livestock which are regarded as an asset too. Today we’ll turn to another topic knowing that we’re staying in the same context.

    This March, the EU bank cuts the benchmark of interest rate until 0% to stimulate economy, not only in Europe, even in US, Canada and Japan, the banks cut the interest rate to the negative rates, in order to insure some recoveries for economy and avoid the case of collapse or recessions, but the problem can be worse, in brief when the risks of inflation increase because of the big amount of money created and delivered without stock of gold or foreign currency, which leads to falls of prices then the weakening of production’s cycle, so the question is: what’s the harm on economy because of the existing of interest high or less from banks?  And why these rates of interests make negative effects on economies’ growth?

    From definition; the usury is an illegal action to lending money at high rates of interest. From the Christian perspective, clear chapters from the bible preventing the deal on usury. But the church –after many centuries- distinguished between the people in the same society about the way how to apply on them these rules of interests (the nobles were like victims who deserve to get compensations, else the money will stay between hand of church instead to direct toward poor), “that fact strengthen the financial power of church into the society.” so this practice is forbidden from all religions on account of its bad consequences on the economy, and social life in every society.

    Although the term “usury” is widely taken to mean “excessive interest” (which is never defined how many exactly) or illegal interest, now the usury is defined as a practice to lend the money with an interest.  This interest is fixed by time, and when the time isn’t enough to return (money + interest); this last will grow up more and more

    A European study about the “usury laws in EU” said it its main finding that usury ceiling had led to a high degree of exclusion from small loans for poor people in those countries and created a market of illegal lending.

    Of course, government policy for decades has been to encourage lenders to provide mortgage loans to lower-income families, “In this way, homeownership would be impossible to all but the wealthiest people they do”. That looks unjust in somehow when people can’t guarantee the basic needs for a normal life to a family (I mean to have a shelter). In the next article we’ll continue a second part to show a different perspective too going on the same way to fight the usury.