A Critical Approach to Debt Financing in a Muslim Society: The Case of Qatar

Öz

A debt-based society continuously encourages people to go into debt, even through legal means, and this leads to a series of problems.. Though Shariah scholars emphasize the Islamic legacy of lending a helping hand, they overlook society's excessive dependence on debt and its consequences. This paper discusses the harms of debt in Muslim societies based on content analysis of four fatwas issued for Islamic finance institutions. First, the types of debt in Islamic Banking are explained. Then, four fatwas are analyzed regarding mortgage and credit card debt.The paper argues these fatwas also overlook global capitalism, which worsens debt burdens on disadvantaged populations. It is followed by highlighting environmental issues and consumerism. Next, the necessity of preventing excessive debt dependence in Muslim communities is discussed with the example of Qatari society. The research concludes that the examined fatwas fail to consider debt’s societal impact, including its negative effect on mental health and contribution to a consumerist culture.

Anahtar Kelimeler

• Debt Financing
• Qatar
• Murabaha
• Muslims
• Ijara
• Mudaraba
• Musharaka

Müslüman Bir Toplumda Borç Finansmanına Eleştirel Bir Yaklaşım: Katar Örneği

Öz

Borç temeline dayalı bir toplum, yasal yollarla bile insanları sürekli olarak borçlanmaya teşvik eder ve bu durum bir dizi soruna yol açar. İslami finans kurumlarının danışma kurulunda yer alan bazı İslam alimleri, İslam'ın yardımlaşma geleneğine ve borç verme mirasına dikkat çekerken, toplumun aşırı derecede borç bağımlılığına ve bu bağımlılığın toplum üzerindeki sonuçlarına karşı çıkma gerekliliğini göz ardı etmişlerdir. Bu makale, İslami finans kurumları için yayınlanan dört fetvanın içerik analizi temelinde, Müslüman toplumlardaki borcun zararlarını ele almaktadır. İlk olarak, İslami bankacılık sistemindeki borç türleri açıklanmaktadır. İkinci olarak, ipotek ve kredi kartı borcu sorunlarına ilişkin dört fetva analiz edilmektedir. Makale, incelenen fetvaların dezavantajlı nüfuslar üzerindeki borç yükünü daha da ağırlaştıran küresel kapitalist sistemi de göz ardı ettiğini savunmaktadır.Üçüncü olarak, borç kültürünün toplum ve çevre üzerindeki etkisi ele alınmaktadır. Ardından, Müslüman topluluklardaki aşırı borç bağımlılığına karşı önleme sorunları ve gerekliliği, Katar toplumu örneğiyle analiz edilmektedir. Araştırmada, incelenen fetvaların, ruh sağlığı üzerindeki olumsuz etkisi ve tüketim kültürüne katkısı da dahil olmak üzere borcun toplumsal etkisini yeterince dikkate almadığı sonucuna varılmaktadır.

Anahtar Kelimeler

• Borç Finansmanı
• Katar
• İcara
• Mudarabe
• Müşareke
• Murabaha
• Murabaha

Kaynakça

1. Abdallah, H. (2021, May) ‘Qatar’s Amir Tamim donates QR 200 million to wipe out debts’. Doha News. (last accessed July 02, 2024)
2. Abozaid, A. & Khateeb, S. H. (2022). A critical Shariah and maqasid appraisal of Islamic credit cards. European Journal of Islamic Finance, 9(3), 14-20 https://doi.org/10.13135/2421-2172/6816
3. Abozaid, A. & Khateeb, S. H. (2023). Tools and conditions for achieving sustainable development in Islamic finance. In: Z. H, Jumat; S. H. Khateeb; & S. N. Ali (eds). Islamic finance, finTech, and the road to sustainability: Reframing the approach in the post-pandemic era. (pp. 41-58). Palgrave Macmillan.
4. Aggarwal, R. K. & Yousef, T. (2000). Islamic banks and investment financing. Journal of Money, Credit and Banking, 32(1), 93-120. https://doi.org/10.2307/2601094
5. Al-Hamad, S. S. (2019). Reasons for increasing consumer behaviour in Qatar society. International Journal of Liberal Arts and Social Science, 7(10), 19-26.
6. Asutay, M. (2007). Conceptualisation of the second best solution in overcoming the social failure of Islamic finance: Examining the overpowering of homoislamicus by homoeconomicus’. IIUM Journal of Economics and Management, 15, 1-17.
7. Ayub, M. (2007). Understanding Islamic finance. John Wiley & Sons.
8. Azma, N.; Rahman, M.; Adeyemi, A.; & Rahman, M. (2019). Propensity Toward Indebtedness: Evidence from Malaysia. Review of Behavioral Finance, 11(2), 188-200

9. Baudrillard, J. (1998). The consumer society: Myths and structures. Sage. Bauman, Z. (2007). Consuming life. Polity Press.
10. Baudrillard, J. (1998). The Consumer Society: Myths and Structures. Sage Publications.
11. Bayoumy, A. G. H. M. (2012). Communities in the 21st century: Effectiveness of new media channels in shaping public awareness and participation in development and charity campaigns. Qatar Foundation Annual Research Conference, p. 3
12. Bell, D. (1976). The cultural contradictions of capitalism. Basic Books.
13. Bensaid, B.; Grine, F.; Nor, M.; & Yusoff, M. (2013). Enduring financial debt: An Islamic Perspective, Middle East Journal of Scientific Research, 13 (2), 162-170
14. Biplob, H.; Abdullah, F.; & Hossain, G. (2022). An Islamic Debt and Wealth Management Framework in the Context of Malaysia. Journal of Muamalat and Islamic Finance Research, 19(2), 41-57 https://doi.org/10.33102/jmifr.v19i2.460
15. Chapra, U. (1992). Islam and the International Debt Problem. Journal of Islamic Studies, 3(2), pp. 214-232. https://www.jstor.org/stable/26195577
16. Dufour, D. (2008). The Art of Shrinking Heads: On the New Servitude of the Liberated in the Age of Total Capitalism. Polity Press.
17. Dusuki, A. W. & Abdullah, N. I (2006). The ideal of Islamic banking: Chasing a mirage? Paper presented at INCEIF Islamic banking and finance educational colloquium, Bank Negara Malaysia. Kuala Lumpur, 3-5 April 2006.
18. El-Gamal, M. (2006). Islamic finance: Law, economics, and practice. Cambridge University Press.
19. El-Gammal, M., & Abozaid, A. (2021). Environmental protection and sustainable development: An Islamic perspective. In: Ali, S.N., Jumat, Z.H. (Eds). Islamic finance and circular economy: Challenges and opportunities. Springer Nature.
20. Farooq, M.O., (2015). Islamic finance and debt culture: Treading the conventional path?. International Journal of Social Economics, 42(12), 1168-1194.
21. Fenton, J., (2012). ‘Qataris adopt debt as a luxury accessory’, Financial Times, May 14, 2012 < https://www.ft.com/content/d4848c0e-9db8-11e1-838c-00144feabdc0 > (last accessed July 02, 2024)
22. Finn, T. (2016, March). 'Social curse' of huge personal debt raises worries in wealthy Qatar’. Reuters. < https://www.reuters.com/article/us-qatar-debt-doha-idUSKCN0W51UC > (last accessed July 02, 2024)
23. Graeber, D. (2011). Debt: The First 5,000 Years. Melville House.
24. Johan, Z. J., Hussain, M., Mohd, R., & Kamaruddin, B. H. (2020). Muslims and Non-Muslims Intention to Hold Shariah-Compliant Credit Cards: A SmartPLS Approach. Journal of Islamic Marketing.
25. Joireman, J., Kees, J. & Sprott, D. (2010). ‘Concern with immediate consequences magnifies the impact of compulsive buying tendencies on college students' credit Card Debt’. Journal of Consumer Affairs, 44: 155–178
26. Kahf, M. (2006). Maqasid Al-Shari’ah in the Prohibition of Riba and their Implications for Modern Islamic Finance. Paper presented at IIUM International Conference on Maqasid Al-Shari’ah, August 8-10, 2006.
27. Kahf, M., & Mohomed, A. N. (2016). Credit Cards: Contemporary Issues from Economic and Shariah Perspective. Journal of King Abdulaziz University-Islamic Economics, 29(1), 57-80.
28. Khan, M. (2020). Theory of consumer behavior: An Islamic perspective. MPRA Paper 104208, University Library of Munich. https://doi.org/10.13140/RG.2.2.12941.97760
29. Khateeb, S. H., Jumat, Z. H. & Khamis, M. S. (2021). Islamic perspective on circular economy. In: S. N. Ali & Z. H. Jumat (Eds.) Islamic finance and circular economy: Challenges and opportunities. Springer Nature.
30. Lacy, P., & Rutqvist, J. (2015). Waste to wealth: The circular economy advantage. Palgrave Macmillan.
31. Lea, S. E. G. (2021). Debt and over indebtedness: Psychological evidence and its policy implications. Social Issues and Policy Review, 15(1), 146–179. https://doi.org/10.1111/sipr.12074
32. Lebdaoui, H. & Chetioui, Y. (2021). Antecedents of consumer indebtedness in a majority-Muslim country: Assessing the moderating effects of gender and religiosity using PLS-MGA. Journal of Behavioral and Experimental Finance, Vol. 29, 100443 https://doi.org/10.1016/j.jbef.2020.100443
33. Lim, W. M., Ng, W. K., Chin, J. H., & Boo, A. W. X. (2014). Understanding Young Consumer Perceptions on Credit Card Usage: Implications for Responsible Consumption. Contemporary Management Research, 10(4), 287-302.
34. Lusardi, A. (2019). Financial literacy and the need for financial education: Evidence and implications. Swiss Journal of Economics and Statistics, 155(1), 1-8. https://doi.org/10.1186/s41937-019-0027-5
35. Mian, A. and Sufi, A. (2014). House of debt: How they (and you) caused the great recession, and how we can prevent it from happening again. University of Chicago Press.
36. Mobasher, M. (2016). Globalization and Socio-Cultural Change in Qatar. Qatar Foundation Annual Research Conference, p. 2.
37. Mokhtar, M., & Ismail, A. (2013). Shariah Issues in Managing Household Debt: The Case of Malaysia. Jurnal Pengurusan, 37, 63-76.
38. Netemeyer, R.; Warmath, D.; Fernandes, D.; & Lynch, J. (2017). How Am I Doing? Perceived Financial Well-Being, Its Potential Antecedents, And Its Relation to Overall Well-Being. Journal of Consumer Research, 45(1), 68-69 https://doi.org/10.1093/jcr/ucx109
39. Neves, J. A. (2016). Factors Influencing Impulse Buying Behaviour Amongst Generation Y Students [Masters dissertation]. North-West University. https://repository.nwu.ac.za/bitstream/handle/10394/24927/Neves_JA.pdf?sequence=1
40. Niemi, M. (2012). Consumer Debt in Modern Society: Risk, Responsibility, and Regulation. Ashgate Publishing. Qatar National Development Strategy 2011-2016, https://www.psa.gov.qa/en/nds1/Documents/Downloads/NDS_EN_0.pdf (last accessed July 02, 2024)
41. Qatar Second National Development Strategy 2018-2022, https://www.psa.gov.qa/en/knowledge/Documents/NDS2Final.pdf (last accessed July 02, 2024)
42. Rahman, M.; Azma, N.; Masud, A.; & Ismail, Y. (2020). Determinants Of Indebtedness: Influence of Behavioral and Demographic Factors. International Journal of Financial Studies, 8(1), 8 https://doi.org/10.3390/ijfs8010008
43. Shariff, A. M., Ariffin, M. I., Mohammed, M. O., & Mahmood, R. (2023). Islam, Western Materialism and Malaysian Muslims’ Complex Debt Behavior: An Analysis of the Religious Experts’ Viewpoints. International Journal of Academic Research in Business and Social Sciences, 13(2), 24 – 43.
44. Ugurel, I. (1999). External Debt of the Islamic Countries: The Present Situation and Future Prospects. Journal of Economic Cooperation, 20(4), 73-106
45. Wilson, R. (1993). Equity finance of economic development: Feasibility and ethical desirability. Managerial Finance, 19 (7), 70-81.
46. Wilson, R. (2004). The development of Islamic economics: Theory and practice. In: T.F. Suha & B. Nafi (Eds.) Islamic thought in the twentieth century. (pp. 195-222.). IB Tauris,
47. Wijaya, R. P., & Ismail, N. (2020). Sharia Credit Card in the View of Maqasid al-Sharia. Al-Iktisab, 4(1), 17.
48. Yaacob, H., Muhammad, M., & Smolo E. ‘International convention for Islamic finance: towards standardization’. ISRA Research Paper No. 29/2011. Kuala Lumpur: International Shariah Research Academy for Islamic Finance. p.54
49. Yousef, T. M. (2004). The murabaha syndrome in Islamic finance: Laws, institutions and politics. In: C. Henri, W. Rodney (Eds.) The politics of Islamic finance. Edinburgh University Press.