What is Debt?




Oxford English Dictionary define term 'debt' as a sum of money that is owed or due. Islam takes the matter of debt very seriously and warns against it and urges the Muslim to avoid it as much as possible.

It was narrated from ‘Aa’ishah (may Allaah be pleased with her) that the Prophet (peace and blessings of Allaah be upon him) used to say in his prayer: “Allaahumma inni a’oodhi bika min al-ma’tham wa’l-maghram (O Allaah, I seek refuge with You from sin and heavy debt).” Someone said to him: “How often you seek refuge from heavy debt!” He said: “When a man gets into debt, he speak and tells lies, and he makes a promise and breaks it.” Narrated by al-Bukhaari (832) and Muslim (589). 

 As we all know, riba' may easily found in any transaction that related to debt. In Holy Quran, Allah said,

“And whatever riba you give so that it may increase in the wealth of the people, it does not increase with Allah.” [Ar-Rum 30:39] 

Debt is permissible if there are no any additional wealth involved related to the sum of the money borrowed, or the time period of borrowing money. For example, A borrows RM100 from B, and after a certain time, A returns back the RM100 to B, without any additional cost.

But, most of financial institutions right now does not apply this concept since they are the profit-making institutions. Because of that, most of the debts transaction nowadays are prohibited, or is not permissible in Islam since there are riba' involved.

Recently, there are a lot of Islamic products introduced in market to become the remedy for conventional transactions. Let us hope these products can replace the current conventional transactions and spread the justice towards every day economy.

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