Ribba (ربا)

Ribba means 'interest'. Interest is when an individual gives more money back to the lender than originally borrowed. It is forbidden to take interest in Islam.

Person A needs a loan - say £20. He goes to person B and asks him for it. Person B lends him the money but seeks interest at 20% when the person pays him back later. Person A agrees and takes the £20 from B. A month later person A needs to pay back person B, so he gives him back his money (£20) as well as the interest (20% * £20 = £4); So in total he gave £24 to person B, and person B is £4 richer. This is called ribba and is not permitted in Islam.

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