What is Interest / Riba?
Interest is the rent of money, and is called in the Islamic Jurisprudence “Riba” and in the Old Testament “Ribbit”. In a Conventional Riba institution the Riba Banker rents you the money at a rental rate called interest. This interest is defined for all markets regardless of the economic environment of the particular market. In a Riba-free transaction the actual market-defined rental of an actual tangible asset or service is charged. This rent differs from market to market depending on the supply and demand of the tangible asset/property being financed. The LARIBA banker in fact INVESTS jointly with the user of funds while the Riba banker LENDS money to the user of funds. In the LARIBA System we FINANCE and NOT lend. The only loan allowed by the Islamic Jurisprudence is a Loan for Good Cause (Qard Hassan) and is given without interest or added value. There are two types of Riba: 1. Riba Al-Fadl, which is an added charge to the money loaned because of delayed payment, which is definitel
