11-14-2005, 03:25 AM
Looking at this issue from the other side of the fence:
A common complaint by Islamic lenders, when making business loans, is that the lender is not allowed to charge a predetermined amount for a loan. Instead, the lender becomes a partner in the business, and is paid a portion of the company's profits.
The problem with this is that it's in the borrowers best interests to run a company that loses money. if there are no profits, the lender does not get paid. So, what often happens is that the borrower engages in unethical activities such as:
- hiring his wife and kids, and paying them a salary two or three times greater than what is fair
- if the business owner needs to buy any sort of supplies, then he will buy them from (for example) his brother, and pay him three times what the supplies are worth
Generally speaking, the western system of banking doesn't have these sorts of problems. If a customer thinks his bank is treating him unfairly, then he can go find another bank. And if a bank doesn't trust a customer, they can stop doing business with him.
In other words, the laws of "supply and demand" keep everyone on their toes, and makes it more difficult for a bank to cheat customers, and for a customer to cheat banks.