Trade of Debts Resulting from Financial Intermediation: Analysis from Sharia Perspective

Abstract

The modern financial system encourages people to incur debts to fulfill basic needs and spend beyond one’s wants. The core of this system is based on interest, which results from the financial intermediation between creditors and borrowers. Regardless of the interest element prohibited in Islam, the notion of excessive debt creation through financial intermediation and trading the debt is very serious, as it may lead to global financial crises. The study seeks to address debt trading from a Sharia perspective and address the justifications and attempts by some institutions to validate debt trading, despite its established prohibition in the Shariah. To achieve the above, the paper employs qualitative research methodology, which adopts a textual analysis approach together with a review of the stands of the contemporary Fiqh bodies. The study finds that the excessive creation of debt through financial intermediation and its concentration in financial institutions poses a severe threat to the economy and carries the seeds of financial crises. Following debt creation and concentration, debt trading aggravates the situation. It pushes it beyond borders, whereas Sharia, through prohibiting debt trading, which is advocated thoroughly in the study, gives Islamic finance genuine immunity against financial crises.

Sistem keuangan modern mendorong orang untuk berutang untuk memenuhi kebutuhan dasar dan membelanjakan melebihi kebutuhannya. Inti dari sistem ini didasarkan pada bunga yang dihasilkan dari intermediasi keuangan antara kreditur dan peminjam. Terlepas dari unsur bunga yang dilarang dalam Islam, gagasan penciptaan utang yang berlebihan melalui intermediasi keuangan dan perdagangan utang sangat serius karena dapat menyebabkan krisis keuangan global. Studi ini berusaha untuk membahas perdagangan utang dari perspektif shariah dan membahas pembenaran dan upaya oleh beberapa institusi untuk tetap memvalidasi perdagangan utang meskipun ada larangan dalam Syariah. Untuk mencapai hal di atas, makalah ini menggunakan metodologi penelitian kualitatif, yang mengadopsi pendekatan analisis tekstual terhadap dokumen yang dikeluarkan oleh beberapa badan fikih kontemporer. Studi ini menemukan bahwa penciptaan utang yang berlebihan melalui intermediasi keuangan dan konsentrasinya di lembaga keuangan menimbulkan ancaman berat bagi perekonomian dan membawa benih krisis keuangan. Mengikuti penciptaan dan konsentrasi utang, perdagangan utang memperburuk situasi. Ini mendorong sistem keuangan melampaui batas kemampuan. Oleh karena itu, Shariah melalui pelarangan perdagangan utang secara menyeluruh sebagaimana ditegaskan dalam penelitian ini memberikan kekebalan sejati keuangan Islam terhadap krisis keuangan.

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