The generous Quran in Surat Al-Nahil Verse 43 says: �Ask the people
who know if you do not.�
In other words, the first person you should ask is yourself. It is only
after you ask yourself and you are unable to determine whether
something is right�or wrong�should you ask others. Too many Muslims
forget the �if you do not� part of the verse and
immediately�delegate�their judgement�responsibilities to�others. The
prophet Mohammad, peace be upon him, mentions this meaning in
the beautiful Hadith narrated by Imam Ahmad:
Wabisa bin Mabad said:�I approached the prophet, peace be upon
him, and he said: You came to ask me about right and wrong didn�t
you? I replied:Yes, The prophet said: ask your heart, that which is
righteous settles in one�s self and comforts the heart, and that which
is sinful upsets one�s self and wavers in the heart, regardless of what
people tell you.
To assist in determining�right from wrong regarding the Shariah-
compliance of a certain financing product, here�are 3�useful questions
to ask:
1. When you try to justify using the product, is the only
argument you can make: �they have a sharia council that
approved it�?
If you can�t convincingly articulate how a product provides a
substantively different experience than another product you know to
be prohibited in Islam, I�d stay away.
Albert Einstein famously said: �If you can�t explain it to a six year old,
you don�t understand it yourself.�
And if you don�t understand how a personal financing product is
Shariah compliant, it�s probably not. Trust your judgement and don�t
be intimidated by the beard length of someone who says it�s Shariah
compliant. With all due respect to people who sit on Sharia-boards,
but Shariah compliance is not rocket science. It�s a judgement call that
the average person can make if they spend some time�to educate
themselves on the topic.
I�ve created some mental tools to assist the average Muslim consumer
in doing just that. e.g.�3 ways to identify Riba.
2.�Assume Shariah-compliance doesn�t matter to you. Would
you still use�this product?
If the answer is no, then the product is probably not Shariah-
compliant.
It is impossible that Allah, the most compassionate the most merciful,
will ask His believers to use a product that is inferior in utility to other
products on the market. Especially if the products that it is inferior to,
let�s say a traditional loan, is prohibited in Islam because
it�s�considered unfair to the consumer!
I say it�s probably not Shariah-compliant because it is always possible
that the product contains benefits that are unknown to you or that you
just have bad judgement. I consider both these possibilities to be
relatively small since:
1- Whoever is selling the product will make sure you are aware of every
single possible feature and benefit of�their product, even the very far
fetched ones.
Case in point, I was watching a promotional video for one of the
�Islamic� financing solutions and they mention, quite enthusiastically,
that they will share their customers any loss incurred from �Eminent
Domain�. I admit I didn�t know what that was so I looked it up. Turns
out, Eminent Domain is the power of a government to acquire private
property for public purposes. Really? How often does that happen?
Also, this was an American company and nowhere in the video did it
mention that �Just compensation� from the government to the
property owner is already guaranteed in the U.S. Constitution!
2- People wise up over time. You may exercise bad judgement the first
time you choose a product, but the second and third time? It�s unlikely
if you have alternatives.
If you�re unclear on how to answer�would you still buy this product if
Sharia-compliance wasn�t a consideration?�there�s actually a very
straight-forward way to get a feeling for the answer.�Does the
product have non-Muslim customers?�If the answer is no, there
is a good chance you are just buying the words �Sharia-compliant� that
were used when they marketed the product to you. Otherwise, if the
product was superior to alternatives, some non-Muslims would have
seen this and bought the product. Especially if the product is being
offered in a predominantly non-Muslim country.
3. What do state and federal government agencies think?
If the company�s disclosure documents include the words �loan� and
�interest� that�s because the government thinks the product is these
things and requires the company to use this terminology. This is not a
matter of government bureaucracy or people in the government not
having the mental capacity�to understand the genius behind this
particular �Islamic� finance product. The government looked at the
product, read the terms, and said something along the lines of
�yeeaaah I�m not sure what exactly you Muslims are up to, and while
you have the freedom to call your product whatever you like, this sure
as hell seems like interest-bearing debt to us and you need to make
this clear to your customers.�
For example, in the United States, if you were truly paying �rent� or
some other euphemism used to disguise interest-bearing debt, the
IRS�wouldn�t�require the people receiving �rent� payments from you�to
disclose�how much they received ininterest�from you last year.
So the next time your weighing whether or not to buy a product that
claims to be �Shariah-compliant� make sure you ask yourself the
above 3 questions. If one or more�of the answers doesn�t check out,
trust your logic, and make your decisions accordingly.
For more on Islamic finance see: https://foundationsforislamiceconomics.wordpress.com/
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