Riba (Usury)

Riba, often translated as usury or interest, refers to the practice of charging excessive or exploitative interest on loans. In Islamic finance, riba is prohibited because it creates inequality and can lead to financial exploitation. Instead of earning money through interest, Islamic finance encourages profit-sharing and fair economic practices. The prohibition aims to promote social justice and ethical financial dealings, emphasizing risk-sharing and mutual benefit. Riba is seen as harmful to both individuals and society, as it can deepen economic disparity and foster dependency on debt.