islamic economic renaissance 387But compensating the lender, the counter argument is presented,
may result in an injustice to the borrower who was not aware at
the time of receiving the loan of the possibility of him paying such
an increase in the future at the time of repayment, and who, after
all, has suffered, like the lender, from the reduction in the real value
of money. Moreover, such a compensatory increase may bear with
it the suspicion of Ribà. But the proponents of paying financial com-
pensation argue in return that Ribàshould not be used as the basis
of the rejection of the compensation principle because if the oppo-
site took place and the money appreciated in value over the period
of the loan and the borrower paid the same amount of debt in mon-
etary terms to the lender this would still bear the suspicion of Ribà.
It would appear as if the lender had charged Ribàon the loan since
he would be getting his money back at a higher real value than that
of the value at the time of receiving the loan. But this is not a real-
istic assumption, the argument of the opponents continues, as what
is more observed in history than not, is that the real value of money
is reduced through time by the effect of inflation. It is important to
stress however that the debate is not related to gold and silver if
used as currency, which in this case has to be returned at the same
quantity, and quality. The debate is related particularly, and exclu-
sively, to other forms of money that carry the power of the author-
ity of government more than the value of the precious metal in it.
Examples of this money is money made of less precious metal than
gold and silver, such as copper, and in modern times money made
at the authorization of Treasury or Central Bank, such as banknotes.
The subject was of concern to the Medieval Muslim jurists as well
as to the Islamic economists of today. And the jurists were not unan-
imously united on the issue; different schools of thought had different
opinions. The agreements and differences between the jurists are
summarized by Isaa as follows (Isaa, 1993):
The first opinion: the borrower is to pay back the lender the same
amount of money that he borrowed regardless of the changes in the
value of money. This is mainly to avoid Ribà.
The second opinion: the borrower is to pay back the “real” value
of money as was received at the time of concluding the loan or con-
cluding the sale contract if the loan was a result of credit sale. The
reason is mainly to maintain the real value of money as a store of
value.