immorality of interest

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But is in this a good idea if you know before hand that whether you will make profit or loss

The point is, nobody can be sure what will work. I thought mobile phone covers was a stupid idea that would never catch on, so I refused to get involved. Stupid me.

The bloke who invented SMS had no end of trouble convincing his employer it was a good idea.

It is by taking risks that progress gets made.

So the problem here is not just interest rates, it is that nobody is willing to take risks at the moment because we are in a global depression.

Original post by A133nwa

Islamic help you and let you know very clearly that if your project will be successful or not.

They cannot predict the future any better than anyone else.

You have not managed to convince me that interest rates are the problem. I think the global depression is the problem: there isn't the spare money around to lend to people.

What did you want your questionnaire to cover? Exactly what are you researching? Exactly what question are you trying to answer, or what argument are you trying to prove? What evidence are you seeking? Answering those may help you find your questions.

Reply 21

RVNmax

Original post by A133nwa

But is in this a good idea if you know before hand that whether you will make profit or loss, rather than actually making a lose and then realizing it. Islamic help you and let you know very clearly that if your project will be successful or not. Also how come some of the authors have mention that Islamic finance is is the solution for current economic crisis plus they have actually survive during that time.

Also if you have any question that you want me to include in my questionnaire please do let me know.

Nothing is certain in life, there is risk associated with everything. One does not 'know before hand' if a profit or loss will come but you take into account all the risks and predict the chances. The fact that you say there is a rule for splitting/sharing losses even within Islamic Banking shows that it's never going to be a perfect prediction.

Just like you might make losses, you might make profits. If you've got the money then sometimes it may be worth taking the chance.

Our overall economy might be worse/better off depending on the system we used. At the moment interest charges are low, and so lending is lower than previous levels as well. It's kind of towards Islamic Finance/Interest-free than it used to be with higher interest and lending. So yes, business struggle for financing, but that's because their risk is deemed to be too high; clearly if it is deemed to be too high for Islamic Banking as well then that is not an issue that can be solved by Islamic Banking as you say.

In respect with the Islamic system of sharing profits-losses as you describe, that is also part and parcel of the governments job:
some businesses make profits and some losses, if overall you make a profit surely that's a good thing as the economy would have improved and those profits can get shared between everyone by our government to make up for those losses.

Although, that's not to say that Islamic banking isn't something to move towards, that is for someone knowledgeable to decide whether we would benefit or not with less risky/interest-free lending... I suspect not. :smile:

Reply 22

Rakas21

One should consider that restricting loans may not be a bad thing. It's certainly not a bad thing to refuse credit if that person is likely to default,

Reply 23

Rakas21

Original post by Simes

So the problem here is not just interest rates, it is that nobody is willing to take risks at the moment because we are in a global depression.

They cannot predict the future any better than anyone else.

You have not managed to convince me that interest rates are the problem. I think the global depression is the problem: there isn't the spare money around to lend to people.

What did you want your questionnaire to cover? Exactly what are you researching? Exactly what question are you trying to answer, or what argument are you trying to prove? What evidence are you seeking? Answering those may help you find your questions.

There is no global depression and banks have more liquidity than ever right now.

The simple reason for lower personal credit is that the banks underestimated the default rate before and are therefore risk adverse now. In the mortgage market government has intervened with Help to Buy but not so for credit cards and the like.

I certainly don't think that interest rates are a problem.

Reply 24

Quady

Original post by A133nwa

you yourself have just said that no "nobody wants to lend because the interest rates are low" see the interest came again that mean if some one is really in need of money no one can help due to reason being interest is low. Is init the bank suppose to help like look at Islamic banks they do not charge interest and do profit and loss sharing which will help both parties either if you make profit both the parties can share and if you make loss both can share that too unlike conventional bank leave the customers to pay everything including interest no matter if that person can survive or not.

Islamic banks wouldn't lend to them either...

Consumers end up worse off on a like for like basis when taking a Sharia compliant product - so how is that 'better'? Just philosophically?