3 Questions YOU need to ask about any �Shariah-Com

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/

Edited by Rakaan - 02 April 2015 at 8:49am