If you think about it, many people now consider debt to be a smart strategy. They say that with debt we can accelerate business, increase assets, and expand the business. Sounds cool, indeed. But if we look more clearly, the question is not just “how fast to grow?”, but “in what way to grow?”
Islam views growth not just as a result, but also a process. If there is an additional rupiah from the debt that must be returned, it has entered the realm of usury. And usury, as we know, is not a trivial matter.
Allah ﷻ says:
فَإِن لَّمْ تَفْعَلُوا۟ فَأْذَنُوا۟ بِحَرْبٍ مِّنَ ٱللَّهِ وَرَسُولِه ِ
So if you do not do it (leaving the rest of usury), then know that Allah and His Messenger will fight you” (QS Al-Baqarah : 279)
So, it can grow, it can develop. But the method must be right. And this is where it is important for us to understand the meaning of financial leverage from a sharia perspective.
What is Leverage and Why is it Popular?
Leverage in general terms means using borrowed funds to increase potential income or assets. Usually used in business, property, even stocks.
A simple example is like this: You have a capital of 100 million, but borrow another 200 million from the bank. Then, you buy property or stock, and hope that the profit from the sale can cover the debt + interest, while leaving some profit. Sounds logical.
But logical is not necessarily sharia. Because, as we know, in conventional financing, there are additions to the principal: interest, penalties, or fines. And this is what is a big problem according to Islam.
Allah ﷻ says:
أَحَلَّ اللهُ البَيْعَ وَحَرَّمَ الرِبَا
“Allah has permitted buying and selling and prohibited usury.” (QS Al-Baqarah : 275)
In Islam, money should not grow on its own without real transactions. Wealth grows through fair trade, production, services, or cooperation.
Also read: Tawakkul in Investment Return
Islamic View of Leverage: Between Permissibility and Danger
In Islam, debt is not haram. But debt with additions (riba) is what is haram. So if there is leverage that is based on usury, it is clearly prohibited.
The Messenger of Allah ﷺ said:
مَنْ أَقْرَضَ قَرْضًا فَأَهْدَى لَهُ هَديَّةً فَلْيَرْدِهَا
“Whoever gives a loan and is given a gift (for the loan), then he should return the gift.” (HR. Al-Baihaqi)
Why? Because the gift can be considered an addition to the loan. And any addition to debt is usury.
Sharia only allows leverage under the following conditions: There is no usury, no gharar (unclear contract), no zhulm (harming one of the parties), and there is good intention, not for speculation.
The sharia leverage model is like musyarakah, mudharabah, and other contracts based on trust and cooperation. Not a debt model that traps.
Also read: The Meaning of Tasamuh (Tolerance) Between Investors and Business Partners
Sharia Solution: Cooperation is Safer than Debt
If the goal is to grow, why use debt? In Islam, there is a more blessed and mutually beneficial scheme: cooperation. For example:
– Musyarakah : two or more parties pool capital, share the profits according to agreement.
– Mudharabah : one party has capital, the other party has manpower/expertise.
Both are forms of leverage too. But leverage that is halal and full of manners. Because the risk is shared, the profit is shared, and all is run with a transparent contract.
Remember, the Prophet ﷺ also carried out mudharabah with Khadijah radhiyallahu ‘anha. That’s leverage. But not from debt, but from trust and cooperation.
Partnership and cooperation make wealth spread, not just pile up. It encourages productivity, not just piling up numbers in financial reports.
Also read: Smart Financial Management When You Still Have Debt
Khotimah: Growing is Necessary, But Don’t Ignore Sharia
The intention to grow is good. But don’t let yourself slip because you choose the wrong path. Debt that contains usury is not help, but a trap.
Islam does not reject growth, but gives guidelines for us to grow in a blessed way. Leverage in Islam is not prohibited, but framed. And that frame is sharia: without usury, without zhulm, and full of justice.
So, if we can grow together through cooperation, why accumulate debt that could ensnare us in this world and the hereafter?
Also read: How to Save Money When Your Salary Is Tight
Let’s Visit, Zeed and join for halal investment with Zeed.
Reference:
Al-Qur’an al-Karim, accessed from https://tafsirweb.com/
HR. Al-Baihaqi in Sunan Al-Kubra, chapter Al-Qardh.
Taqiyuddin an-Nabhani, An-Nizām al-Iqtiṣādī fī al-Islām , Beirut: Darul Ummah.
Abu ‘Ubaid Al-Qasim bin Sallam, Buku al-Amwal .
