Riba, often translated as interest, is avoided in many ethical and faith-based financial systems. Avoiding riba does not mean avoiding investment — there are many practical ways to grow wealth while respecting ethical constraints.
Understand what counts as riba
Riba broadly refers to any guaranteed interest on loans. Educating yourself on forbidden structures is the first step.
Use profit-sharing models
Choose investments that share profit and loss (e.g., Mudaraba, Musharaka), which align investor returns with real economic performance.
Favor asset-backed products
Seek financing and investments that are tied to tangible assets or revenue-generating projects rather than speculative derivatives.
Practical steps for individuals
- Audit your current holdings for interest-bearing instruments.
- Move savings into ethical deposit accounts or participative funds.
- Use peer-to-peer participative platforms for direct financing of projects.
Final thought
With careful selection and transparent partnerships, investors can avoid riba while still achieving meaningful financial growth.