Undoubtedly, usury is an unjust and oppressive evil. It is against human nature and human dignity. It increases the riches of the wealthy and drives the impoverished to further depravation.
Understandably, the exploited poor begin to hate the rich. The pent-up hatred then finds an outlet in the form of violence and bloody revolutions.
In the book "Islam and World Peace" it is written, "Islam says that earning should be only in return of efforts and work. because capital itself cannot do any work and make any effort. Hence the wealth of the rich man should not be increased by taking usury."
Increasing wealth by usury is the easiest form of making money but Islam forbids it. Wealth cannot be accumulated by forcing the helpless poor into further destitution; and usury does just that, causing economic imbalance and trampling upon human rights, equity and justice. Maulana Sayed Abul Ala Maududi of Pakistan has written a comprehensive and interesting book on usury that describes its evil effects and the arguments are supported by statistics.
The needy person ends up returning not only the amount loaned to him but far in excess of it. The excess can even amount to more than the principal amount if the repayment is delayed. Taking interest imposes an excruciating financial burden on one who is already needy and it is nothing short of blackmail. Needy people should be given loans without interest. This promotes a feeling of friendship, co-operation and charity.
Interest for Goodly Loans
To give a loan on interest not only destroys the economic balance in the society, it also inflames the feelings of hatred, enmity and selfishness.
The One Who Indulges in Usury is Deprived of Goodness
There are too many disadvantages of taking interest. The earnings of one who takes interest, loses 'Barakat' (abundance andprosperity). Whereas the earnings of hard toil have much 'Barakat'.
The Holy Prophet (s.a.w.s.) says in one of his traditions:
"Worship consists of seventy parts. The most important is lawful earnings."
The Prophet (s.a.w.s.) also says:
"The truthful trader shall be counted among the prophets on the Day of Judgement. His face would glow like a full moon."
The Usurer Does Not Place Trust in Allah
Another misfortune of the usurer is that he loses trust in Allah. He does not pray to Allah to give him 'Barakat'. All his hopes are pinned upon the interest that he collects from his debtors and this is polytheism as discussed in the section on 'Shirk'.
Another point to be noted is that in normal business there is a possibility of both gain and loss. So the businessman not only puts in sincere efforts but prays to Allah for success and profit in his endeavour. An usurer has no fear of loss and feels no intuitive need to pray to Allah for his 'Rizq'. He is thus deprived of an important facet of religion.
The Reward of Giving a Loan is More than that of Sadaqah
One who takes interest is deprived of the rewards that are prescribed for giving a goodly loan. If there are ten merits in giving Sadaqah, the interest-free loan has eighteen merits. An interest-free loan is therefore more rewarding than Sadaqah in the way of Allah. A person who gives respite to his debtors and does not take interest is given a reward that is equivalent to charity of the said amount every day for the number of days that he extends. It is evident that the usurer does not qualify for such rewards. In fact he is afflicted with miserliness and greed, which only increase day by day. Surely the result of miserliness and greed is Hell.
The Fate of the Usurer
We have already seen from the verses of the Holy Quran, the sayings of our Holy Prophet (s.a.w.s.) and of our Imams (a.s.) that the punishment for usury in more severe than that of other sins. We have also discussed the reasons for this. Islam classifies usury as the greatest of the Greater Sins and its punishment is the severest of all punishments. If the usurer does not repent for his acts, his end will be with the disbelievers and those whose eternal abode is Hell. The usurer shall never be released from Hell.
"To whomsoever then the admonition has come from his Lord, than he desists, he shall have what has already passed, and his affair is in the hands of Allah, and whoever returns (to it) these are the inmates of the fire, they shall abide in it."
(Surah Baqarah 2:275)
However there are certain ways to compensate for this sin and pray for forgiveness. Certain sinful acts are forgiven by just repenting sincerely. If a Polytheist repents for his sins and becomes a Muslim, a great sin like 'Shirk' is forgiven. He does not have to do anything more than that. But there are some sins that require compensation in addition to sincere repentance i.e. like the one who has Qaza prayers and fasts. Along with repentance he must perform all the prayers and observe all the fasts due on him. Similarly in the case of interest, the penitent should give back the amount that he has taken as interest from his debtors.
No Barakat in Interest
The above Quranic Ayat continues:
"Allah does not bless usury, and he causes charitable deeds to prosper, and Allah does not love any ungrateful sinner."
(Surah Baqarah 2:276)
Charity spreads peace, promotes beneficence and love in society, whereas usury destroys peace and hardens the hearts of the people.
When usury spreads its roots in society, people have no hesitation in usurping each other's rights. They are only driven by a feeling of enmity, hatred and a passion of revenge. A society devoid of harmony and co-operation cannot progress, it destroys itself with its own corruption. Charity and Sadaqah on the other hand promote feelings of friendship, love and brotherhood. An atmosphere of peace and prosperity prevails which inspires people to further good deeds.
War With Allah and the Holy Prophet (s.a.w.s.)
The Noble Quran says,
"O You who believe! Be cautious of (your duty) to Allah and relinquish what remains (due) from usury, if you are believers. But if you do (it) not, then be appraised of war from Allah and His Apostle..."
(Surah Baqarah 2:278-279)
The proof of one's belief is in obedience of Divine orders. The same verse continues,
"...And if you repent, then you shall have your capital, neither shall you make (the debtors) suffer loss, nor shall you be made to suffer loss."
(Surah Baqarah 2:279)
One who does not obey this command must be prepared for war with Allah and His Prophet (s.a.w.s.).
Tafsir Minhajus Sadeqeen gives an explanation of this verse. It could mean that the severity of the sin of usury is such that if in this world a usurer were to come face to face with the Holy Prophet (s.a.w.s.), the Prophet's (s.a.w.s.) sword would be against him and the Prophet (s.a.w.s.) would be prepared to fight him. In the Hereafter the fire of Hell shall keep him in torment by the order of Allah. The usurer must be fought till he submits to the Divine orders and refrains from taking usury. Traditional reports state that after the revelation of this verse, the Holy Prophet (s.a.w.s.) informed the Commissioner of Makkah that if the tribe of Bani Mughaira does not desist from taking usury, they must be fought against.
The Holy Prophet (s.a.w.s.) also said inter alia in a sermon at Makkah: "Know that the usury which has been accumulated in the period of ignorance is now condoned completely. First of all I condone the interest (that is upon your neck) of (my uncle) Abbas Ibne Abdul Muttalib."
Traditions Denouncing Interest
It is reported from Hazrat Imam Ja'far as-Sadiq (a.s.):
"Taking a Dirham as interest is worse in the eyes of Allah than doing illegal intercourse with Mehram women."
Imam Ali (a.s.) says:
"The Holy Prophet (s.a.w.s.) has cursed one who accepts interest, one who pays interest, one who buys interest, one who sells interest, one who writes the contract of interest and one who is the witness of this transaction."
Ibne Baqeer relates that Imam Ja'far as-Sadiq (a.s.) was informed about the person who took interest and considered it as permissible as mother's milk. Imam (a.s.) said:
"If Allah gives me power over this man, I would strike off his head."
It is clear that to consider interest Haraam is an article of faith. One who disregards this and says that interest is not Haraam becomes an apostate. The Imam (a.s.) can also have him killed.
Interest is Denounced in the Holy Quran
Samaa says that he asked Imam Ja'far as-Sadiq (a.s.) as to why Allah has mentioned the illegality of usury at various places. Imam (a.s.) replied:
"So that people may not forgo acts of charity (like giving interest-free loans)."
Imam Baqir (a.s.) said:
"The worst transaction is that which involves interest."
The Sinner is Deprived of Religious Faith
Zurarah says that I asked Imam Ja'far as-Sadiq (a.s.) concerning the Quranic verse:
"Allah does not bless usury, and he causes charitable deeds to prosper..."
(Surah Baqarah 2:276)
"But I see that wealth of usurers goes on increasing?"
Imam (a.s.) replied,
"What could be a greater loss? That in return of a Dirham of interest he loses his faith. And if he repents of his deeds in the world all his wrongfully earned wealth comes to an end and he becomes a destitute."
The Belly of the Usurer Shall Be Filled With Fire
The Holy Prophet (s.a.w.s.) says,
"One who takes interest, his belly shall be filled with an equal quantity of fire by Allah. If he has earned more from the interest money, Allah will not accept any of his deeds. And till even a grain of interest remains with him, Allah and his angels will continue to curse this man."
Punishment of Usurers in the Barzakh
The Holy Prophet (s.a.w.s.) has also stated:
"On the night of ascension (Meraj) I saw some people trying to stand up but did not succeed because of their huge bellies, I asked, O Jibraeel, who are these people?"
Jibraeel replied, "They are those who have taken usury. Now they can only stand up like those who have been possessed by the Devils."
The Prophet (s.a.w.s.) continues,
"Then I saw them herded upon the path of the followers of Firon. Seeing the extreme heat of the fire they exclaimed. O God! Then when will be Qiyamat?" (It is clear that the fire mentioned in the tradition is of the punishment of Barzakh).