Homonym: riba (Usury)
Riba is an Arabic term that refers to the concept of usury or interest in Islamic finance. It is considered prohibited in Islam because it is believed to exploit borrowers and create inequality. Instead of earning money through interest, Islamic finance encourages profit-sharing and risk-sharing arrangements, promoting fairness and ethical financial practices.
In Islamic teachings, riba is seen as harmful to society, as it can lead to increased debt and financial instability. To adhere to Islamic principles, financial transactions should be based on tangible assets and mutual consent, ensuring that both parties benefit from the agreement without unfair advantage.