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No Compromise on Quality & Service

Riba-free in the Halal industry

Tuesday, December 6th, 2022

Riba Free

Euro Quality Lambs have always been a proponent of Islamic values and ethics in all its business operations and activities. As a leading halal producer, EQL advocates for the broader holistic meaning of halal which is also referred to as a ‘halal lifestyle’.

Riba (interest, usury) is a severe haram in Islam (and the Abrahamic faiths) and any business activities and investments that involve riba are also haram. In today’s complex ecosystem, avoiding interest is difficult, troublesome and sometimes impossible. However, as a Muslim-owned and operated business, EQL has consistently operated as much as possible in a riba-free manner whilst also investing in startups that improve access to better-quality cost-effective riba-free financial services for the ummah.

Riba-free Banking

EQL uses a mixture of conventional and riba-free bank accounts.

Due to the international nature of our business and the number and amount of payments we process (BACS/multi-authoristation-payment-groups etc.) we have had to retain conventional banks. As a consequence we were left with a choice as to whether we instruct the bank not to give us any riba from our credit balances or whether we take that riba and donate it to charity. We have taken the second option because asking to not receive riba means that the banks are left with more riba themselves to lend out and in-turn generate more riba. By cleansing the small amount of riba due we at least are reducing the overall amount of riba generated.

The use of conventional accounts still has the consequence that our deposits are used by the banks to lend out to others on riba. Hence the next favoured option is to save excess funds with riba-free banks. We have riba-free bank accounts with Al-Rayan Bank plc and Halal Bank AG Zurich. Other Islamic saving account options can be found on Islamic Finance Guru’s investment comparison site.

We make dua that Islamic banks improve their services to make them more competitive with conventional peers so that they become a genuine alternative to riba-based banks. We believe there is the potential for a riba-free co-operative bank to make a difference in this space.

Riba-free Finance

EQL does not have any interest-bearing finance or loans for any purpose.

Unfortunately, there are limited options for businesses that want riba-free finance to grow and develop their business. For asset-rich businesses fintechs (e.g. Nester) or Islamic banks (e.g. Al-Rayan Bank plc, Halal Bank AG Zurich, BLME etc.) can provide finance against commercial property. The only other SME riba-free finance option we are aware of is from Qardus, which offers secured and unsecured business finance. There is a need to develop riba-free finance options in this area.

For charities and social projects, qard hasan (no-cost finance) is another means of finance. Our charitable arm, Euro Quality Foundation (EQF) has provided qard hasans to charitable organisations to help finance social impact projects.

Riba-free Investments

EQL only considers riba-free investment opportunities and invests in ethical and impactful businesses to support and develop the riba-free ecosystem for current and future generations.

The aim is to support financial inclusion by means of a riba-free economy and work with experts and organisations that are passionate about excellence, adoption and outcome.

EQL and EQF have invested in a number of startups, funds and organisations that are expected to benefit Muslim businesses and consumers at large. These include

  • Islamic Finance Guru (financial education & investments)
  • Wahed (stocks & shares robo-advisory service)
  • Nester (commercial & residential property finance for investors & borrowers)
  • Simply Ethical (Financial Advisor for pensions & investments)
  • Oasis Crescent (Global stocks, shares, sukuk & property funds)

Riba-free Economy

There are a number of exciting initiatives being implemented to support and develop the riba-free economy.

Watch out for the Riba-Free Foundation which is due to launch soon! One project of the RFF will be to launch a Riba-Free Logo scheme that Halal businesses can use to communicate with consumers that they operate in a riba-free manner. Similar to a Fairtrade logo this will help signpost consumers to those businesses that align with their values and are furthering the development of the riba-free economy.

Watch this space!

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