The Dark Side of Microfinance

Debt: A Help or a Shackle? — A Socially Conscious Reflection

“One who dies in debt has no funeral prayer” — while the interpretation of this statement may be subject to debate, its underlying warning cannot be denied. Although Islam does not categorically prohibit debt, it strongly discourages it and issues stern warnings regarding its consequences. According to Islamic law, there is no general rule that denies funeral rites to a person who has committed a sin. However, during the lifetime of the Prophet Muhammad (peace be upon him), an incident occurred in which he refrained from leading the funeral prayer of a companion who was in debt, and instead instructed others to perform it. This event is enough to demonstrate the seriousness and gravity of debt in Islam.

Why This Obsession with Debt?

This raises an important question: Why is there such a deep interest in debt today? Why has borrowing and lending money become a daily norm in our society? The reality is that almost every NGO collects funds from various international organizations and distributes them as “loans” under the guise of “assistance.” These microloan programs, which were once introduced as tools for poverty alleviation, have now in many cases become commercial traps. Instead of empowering people, they are pushing the poor from “small” to “smaller”—from poverty to absolute destitution.

Replacing Aid with Debt: A Harsh Reality

Those who truly need financial support are being offered loans instead of help. Yet, Islamic teachings tell us, “Whoever relieves a believer’s distress, Allah will relieve his distress on the Day of Judgment” (Muslim). Unfortunately, we have created a system that ignores this compassion and instead prolongs the suffering of the needy. The funds meant to benefit the underprivileged are not reaching them. Rather, the benefits are being reaped by NGO officials and staff—through salaries, commissions, and an intricate web of perks, they are securing their own financial positions.

Debt: A Cycle of Poverty Disguised as Support

Meanwhile, thousands of families are silently sinking under the venomous sting of debt. Victims of this system are being further impoverished and gradually joining the ranks of the socially neglected. Under the pressure of interest and service charges, many are losing their homes—forced to sell off their shelters just to repay loans. Children’s education is being halted due to financial constraints, and many are enduring humiliation and loss of dignity in society. This crisis is not just affecting individuals or families; it is destabilizing the entire social structure. Trust and human relationships are weakening, giving rise to confusion, despair, and new forms of social inequality.

What People Truly Need: Compassion, Not Credit

Looking at these people, one thing becomes painfully clear—debt can never truly fulfill a person’s needs. What the destitute need is genuine human compassion. They seek someone to stand by them—not as a dispassionate lender, but as a helping hand, as someone with a caring and empathetic heart. They hope that someone will come forward without questioning or calculating, without burdening them with repayment schedules, simply to offer help in times of real need. Sadly, our current system offers loans instead of help and, under the pretense of “assistance,” renders them even more helpless.

In Conclusion: Reviving a Humanitarian Islamic Ethos

What we truly need is a society built upon the genuine humanitarian and Islamic principles of empathy, mercy, and mutual support. If, in the name of economic development, we continue to burden our poor brothers and sisters with debt, then such development is nothing short of a path to destruction.

Let us, both individually and socially, cultivate a mindset where assistance, not debt, becomes the first step toward eradicating poverty. When people start loving and supporting one another, only then will this world become a livable place for all.