Imam Sadiq University "Islamic Finance Research" (IFR) 2251-8290 1 1 2011 10 23 The reason behind prohibition of usury The reason behind prohibition of usury 25 56 1515 10.30497/ifr.2011.1515 FA Yahya Alavi Student Journal Article 2011 08 16 Usury is prohibited in Islam and other divine religions. However, the financial system which is common in today's world, especially in West, is founded on the basis of usury. In effect, it is the features present in usurious loans that seduce uncommitted capitalists into preferring this kind of contract to other methods of investment. As a matter of fact, such loans need not be supervised by economic activities, they guarantee the capital itself, and finally they do certainly lead to profitability. Some of the most important reasons for research to be done about the rationale behind prohibition of usury are as follows: spreading new skepticisms and uncertainties regarding usury, taking some usurious contracts out of the realm of usury so that they are no longer considered religiously prohibited (i.e claiming they are not taboo), spreading synthetic contracts, i.e. the ones that are innately usurious loans, and the need to design new contracts with respect to Islam's financial system. <br />The methodology for the present study is analytic and qualitative. In fact, referring to different verses of Quran and various hadiths, and making use of jurisprudential texts and intellectual analyses, the research tries to extract the reason underlying the prohibition of usury, seeking to verify the following hypotheses: <br /> <br />Loan Usury is prohibited due to cruelty it induces, not because of piety (i.e. not because religion says it is so). <br />The reason for loan Usury's being cruel is the transferring of ownership it produces through the loan contract. <br /> <br />Usury systematically causes disorder to occur for suitable and charitable economic activities Usury is prohibited in Islam and other divine religions. However, the financial system which is common in today's world, especially in West, is founded on the basis of usury. In effect, it is the features present in usurious loans that seduce uncommitted capitalists into preferring this kind of contract to other methods of investment. As a matter of fact, such loans need not be supervised by economic activities, they guarantee the capital itself, and finally they do certainly lead to profitability. Some of the most important reasons for research to be done about the rationale behind prohibition of usury are as follows: spreading new skepticisms and uncertainties regarding usury, taking some usurious contracts out of the realm of usury so that they are no longer considered religiously prohibited (i.e claiming they are not taboo), spreading synthetic contracts, i.e. the ones that are innately usurious loans, and the need to design new contracts with respect to Islam's financial system. <br />The methodology for the present study is analytic and qualitative. In fact, referring to different verses of Quran and various hadiths, and making use of jurisprudential texts and intellectual analyses, the research tries to extract the reason underlying the prohibition of usury, seeking to verify the following hypotheses: <br /> <br />Loan Usury is prohibited due to cruelty it induces, not because of piety (i.e. not because religion says it is so). <br />The reason for loan Usury's being cruel is the transferring of ownership it produces through the loan contract. <br /> <br />Usury systematically causes disorder to occur for suitable and charitable economic activities https://ifr.isu.ac.ir/article_1515_bc7316929fe1545bf0b98d114ee3ecb8.pdf