DEBT IN THE PERSPECTIVE OF ISLAMIC LAW

Djubaedi Yunus,Jm Muslimin

doi:10.30997/jsei.v6i1.2187

Abstract

The goal of this paper is to analyze the debt from view of Islamic law. Debt is one of the muamalah instruments in Islam that used for activities in household, companies, and countries to fulfill their life sustainability. At least in two things. First in the fulfillment of the fifth pillar of Islamic obligations, pilgrimage, but there is a polemic using debts because of the additional administrative costs (ujrah). The other side of the polemic of debt in the economic system of Islam even could prevent the world economic crisis, the global economic crisis due to debt plus interest in exchange in the capitalist economic system, but not use Islamic economic system in the world. The method used is a normative method and the analysis shows debt could be for bailout funds for pilgrimmage program as long as the debtor pay this loan as soon as possible, debt is the last option and the value of debt should be measured in accordance with the ability to avoid further misery and debt can provide economic value as long as it is used for business or trade to achieve the world welfare, and the hereafter without performing maisir, farad, usury and tyranny. Sodaqoh and giving sincerely is better than giving debt.

Highlights

Debt is a financial instrument in Islamic economic theory that is used for micro, macro, and international economic activities including between countries without the use of interest
Hajj bailout funds for those who are interested in going on the Hajj but do not yet have money can borrow from the Bank with additional administrative costs, and usually the administrative costs are greater than conventional bank debt interest rate
Countries that apply the Islamic economic system survive from the turmoil of the world financial crisis as it has been proven able to survive amid the turmoil of the world financial crisis that occurred from the 19th century to 2009 in parts of the world including Indonesia

Summary

INTRODUCTION

Debt is a financial instrument in Islamic economic theory that is used for micro, macro, and international economic activities including between countries without the use of interest. Interest-free debt is an instrument in Shariah economics which have proven its role in saving the global economy in the financial crisis (Alden 2015) and in Indonesia in 2007 and 2008 where Islamic banks were still able to operate because Islamic banks were more stable, more profitable and provided cash when savings were withdrawn by customers (Bitar, Madies and Taramasco 2017) while conventional banks are bankrupt, this is because conventional banks are unable to run a supervisory, risk management and closed system (Mollah and Haman 2015). Legal doctrine is often called normative discipline which describes and systematizes norms (disciplines about norms), and and to expand disciplines that use normative positions and create values and interests (Hoecake 2011) and this writing paper explores the views of Islamic law on debts using legal normative methods because this paper is the legal research

AND DISCUSSION

Qordhul lender to the borrower based on goodness only

CONCLUSION AND IMPLICATION