Libya to Ban Interest on Loans

Source

Mustafa Abdul-Jalil, the chairman of the National Transitional Council and de fact president, had already declared that Libyan laws in future would have Sharia, the Islamic code, as its "basic source".

But that formulation can be interpreted in many ways - it was also the basis of Egypt's largely secular constitution under President Hosni Mubarak, and remains so after his fall.

Mr Abdul-Jalil went further, specifically lifting immediately, by decree, one law from Col. Gaddafi's era that he said was in conflict with Sharia - that banning polygamy.

In a blow to those who hoped to see Libya's economy integrate further into the western world, he announced that in future bank regulations would ban the charging of interest, in line with Sharia. "Interest creates disease and hatred among people," he said.

So, the interim leader takes a step at making life better for the country now as well.

You know what that means? He will be assassinated and be called a dictator because he is working for his country and not banks.

I just thought I would share this story with you as this is what our countries should be doing. The should be following suit and banning interest on loans as that would make mortgages less of a 'death-pledge'.

Wow, I mean could you imagine not having to pay interest on your mortgages?

Any thoughts?

Pred...

Originally posted by predator0187
Wow, I mean could you imagine not having to pay interest on your mortgages?

Hate to burst your bubble, but that is NOT a good thing.
Anyone with an ounce of common sense would understand this fact.

If you ban interest on loans then there will be no loans. Which means you will NOT be able to buy a house or a car unless you have the money to pay cash in full. Think about it for a moment. The only reason banks or other such companies offer loans is to make money off the interest. Why would YOU risk losing the money you loaned to someone if you are not going to make a profit from the exchange? Nobody would offer loans because it would be to risky without any reward thus the economy will suffer greatly.

If this is true, it would be extremely hard to get a loan of any sort, and even then it will probably have to be in the full interest of the government.

Originally posted by WhatTheory

Originally posted by predator0187
Wow, I mean could you imagine not having to pay interest on your mortgages?

Hate to burst your bubble, but that is NOT a good thing.

Anyone with an ounce of common sense would understand this fact.

If you ban interest on loans then there will be no loans. Which means you will NOT be able to buy a house or a car unless you have the money to pay cash in full. Think about it for a moment. The only reason banks or other such companies offer loans is to make money off the interest. Why would YOU risk losing the money you loaned to someone if you are not going to make a profit from the exchange? Nobody would offer loans because it would be to risky without any reward thus the economy will suffer greatly.

This is not true. Their national treasury would still issue loans with nominal processing fees. These would most likely be covered by the realtor (or whoever is getting the money). This would destroy banks, not the ability to get loans. This is nothing but good.

reply to post by predator0187


As some have expected this the new Rulers of Libya will be worser then Gaddafi.

reply to post by predator0187


The quote from your source says nothing about loans, but is about the guy now allowing polygamy.
Also I thought that Gaddafi had no interest loans already?

reply to post by WhatTheory


Well before Gadaffi was ousted no Libyans had to buy houses, they were given to them.
From what I understood they had interest free loans already and the reason it didn't hurt the economy was because the oil wealth was shared with the people.

Originally posted by WhatTheory

Originally posted by predator0187
Wow, I mean could you imagine not having to pay interest on your mortgages?

Hate to burst your bubble, but that is NOT a good thing.

Anyone with an ounce of common sense would understand this fact.

If you ban interest on loans then there will be no loans....

there would be loans, but it will just be a service banks provide to it's costumers. and houses would still be bought and sold.

the bank can still take over your house and force a sale if you miss mortgage payments. and service charges can be applied to loans instead of interest.

interest is a scheme to make money without actually doing anything.

Originally posted by Cuervo
This is not true.

Yes it is.
Besides, the OP does not live in Libya. He was wondering how wonderful it would be where he lives.

reply to post by GogoVicMorrow


Yes, I think you are right. There was no usury what so ever. Gadaffi may not have been perfect but Lybia was a much freer and fairer country than the US before they bombed they # out of it.

reply to post by WhatTheory


Yes it would change the economy a great deal. Small loans are one thing but do you understand that on a 30 year mortgage you work 20 years to pay the interest? At this point it looks like much more than simply someone making profit on a loan. Taking into acount what fractional reserve banking really is, this looks like a reconstructed feudal system run through banks by our invisible feudal overlords.

reply to post by GogoVicMorrow


Correct, nothing they have changed is any better than the laws Gaddafi had, they're worse.

they came to power via murder and sexually assaulting the previous leader via his anus- yeah, this regime should offer positive change............

One of the typical ways around the "no interest" is for the bank to buy and resell to the buyer.

For example:

Somebody want s to buy a house listed at $100,000. Instead of loaning the money with interest, the bank simply buys the house and resells it to the person for $200,000 with no "interest" loan.

Umm, I think you will find this is the way of the majority of Muslim countries.

No interest, because it is only the Rothschild's banking system that would dare to charge an interest fee. There are admin charges, but I don't know if these are capped, so the banks may be able to charge what they like in order to make their money.

Either way really, we should try to live within our means as this Greed and Consumerism did contribute to the financial mess we are now in. I appreciate the bank's didn't help one bit by their further Greediness, but many within society did go beyond their spending power, all because we are told we need certain products and gadgets.

Originally posted by Dreamwatcher
One of the typical ways around the "no interest" is for the bank to buy and resell to the buyer.

For example:

Somebody want s to buy a house listed at $100,000. Instead of loaning the money with interest, the bank simply buys the house and resells it to the person for $200,000 with no "interest" loan.

LOL.Yea that sounds good but this isnt a yard sale. You have inadvertently shown why it wouldnt work.
Banks to stay in the game and stay in control must go for the long term interest game. If banks had to buy and the sell back at inflated rates they would be subject to real world economic conditions like the rest of us.....and thats not what they are all about. If it were that easy the banks would go into the real estate business instead of the interest business. Do you thing GMAC gives out loans to help sell cars? No they sell interst packages.

Originally posted by blueorder
they came to power via murder and sexually assaulting the previous leader via his anus- yeah, this regime should offer positive change............

LOL! Well from one anus assaulter to another then.

reply to post by predator0187


Interest was already banned under Gaddafi. Not for religious purposes, but because it's an evil practice. Usury is slavery.

But I'm so glad to see we replaced a secular regime with a hardcore religious militant. Awesome job NATO.

Altruistic or not, they're just following Islamic law.

two

Originally posted by WhatTheory

Originally posted by predator0187
Wow, I mean could you imagine not having to pay interest on your mortgages?

Hate to burst your bubble, but that is NOT a good thing.

Anyone with an ounce of common sense would understand this fact.

If you ban interest on loans then there will be no loans. Which means you will NOT be able to buy a house or a car unless you have the money to pay cash in full. Think about it for a moment. The only reason banks or other such companies offer loans is to make money off the interest. Why would YOU risk losing the money you loaned to someone if you are not going to make a profit from the exchange? Nobody would offer loans because it would be to risky without any reward thus the economy will suffer greatly.

Also imagine if there was no ability to borrow money, the over inflated housing market would be corrected. Remember debt = inflation not growth.