Financial Transactions

Islam has laid down all legislation that takes into account man’s interest, protects his professional and financial rights, whether he is rich or poor, creates a close-knit society and helps develop it in all aspects of life.

Allah commands and encourages Muslims to earn their livelihoods. This is clear in a number of aspects including the following:

  • The Prophet has forbidden us from begging as long as we are able to earn a livelihood and informs us that those who engage in begging despite their ability to scrape a living, lose their dignity in the sight of Allah and that of people: “A person who unnecessarily continues to beg will stand before Almighty Allah [on the Day of Judgement] without a shred of flesh on his face.” (Saheeh Al-Bukhaaree: 1405; Saheeh Muslim: 1040)
    He also said, “If a person who is afflicted with poverty refers it to people, his poverty will not be brought to an end; but if he refers it to Allah, Allah will soon give him sufficiency.” (Sunan Ahmad: 3869; Sunan Abu Daawood: 1645)

Islam respects all types of occupations as long as they are lawful and do not involve any wrongdoing whatsoever.

  • Islam respects all types of occupations in any field, trade, industry, services, investment or in any other field, as long as they are lawful and do not involve any wrongdoing whatsoever. Indeed, Islam informs us that prophets engaged in decent occupations prevalent in their societies. As the Prophet ﷺ said, “Allah did not send a prophet who did not tend sheep.” (Saheeh Al-Bukhaaree: 2143) He mentioned once that Prophet Zachariah  was a carpenter. (Saheeh Muslim: 2379)
  • A person who engages in an occupation with the intention of supporting himself and his family and helping the needy will be abundantly rewarded for his effort.

All Types of Transactions Are Generally Allowed in Islam

All types of transactions are, as a general rule, allowed in Islam. These include selling, buying, leasing and all kinds of transactions which people need in their everyday lives, with the exception of those things which are forbidden due to their innate impurity or the manner they are acquired.

Things That Are prohibited Due to Their Innate Impurity

These are things which Allah has declared unlawful due to their innate impurity and therefore must not be sold, purchased, leased, manufactured or put into circulation.

Examples of things which Islam has prohibited due to their innate impurity

  • The flesh of dogs and pigs
  • Dead animals or any part of them
  • Alcoholic drinks
  • Drugs and all other substances which are injurious to health
  • materials that aim to spread immorality, such as pornographic tapes, magazines and websites
  • Idols or anything that is worshipped besides or instead of Allah

Things That Are prohibited Due to the Manner They Are Acquired

These are things which are naturally lawful but have become unlawful due to the manner in which they are acquired, causing harm to the individual and society at large. Things which generally render transactions unlawful are:
Usury (ribaa), deception, injustice and gambling
We will clarify these in the following pages.