Islamic Relief Debt Policy
Islamic Relief seeks to alleviate the poverty and suffering of the poorest people and, as such, must do what it can to remove the root causes of poverty. One of these root causes is international debt. Islam condemns both exploitation and the concentration of wealth. As loans have the risk of causing both, they should be issued with caution, and lenders and borrowers should share the risk of the loan. Usury is not allowed as it tends to aggravate indebtedness. Unfortunately, the international banking system does not work in line with these principles. Instead, the bulk of the loans that have caused the indebtedness that many developing countries are in has been issued irrespective of the spending objectives, without risk-sharing clauses, and with interest rates that have spiralled much of the developing world into a debt trap that has impacted negatively upon the lives of many millions of people.
Islamic Relief Worldwide (2009) Islamic Relief Debt Policy, Islamic Relief Worldwide, Policy & Research Unit, Birmingham, UK