Name : Nur Shamimi binti Ahmad (3111013121)

The effects of riba towards economics, social and society.

Riba is forbidden because it can bring harmful effects to the economic, social and society. The first effects of riba in economic is injustice towards debtors because debtors have to paid extra amount or interest to the capital owner. Misallocation of resources in the economy is also one of the effects. Beside that, riba can give bad impact to economic for example inappropriate in economic growth. This is because the capital owner will get the interest from the borrower continuosly until the end of the debt settlement period. Beside that, riba also will bring chaos and crisis to the economic for example inflation and unemployment will increase because of riba. Another effect of riba is investment activities become passive because money works as growth and development eliminator. The effects of riba in social is activities of riba will divide the people into classes like upper class, middle class and lower class. This generates envy and hatred among the poor toward the rich, resulting in social disorders, conflicts and at times breeds revolutions & movements. Riba also will create wide gap between the rich and the poor. This happened because the rich will gain profit through the extra amount or interest of the debt. Riba also will effect the psychological for example riba will create lazy capital owner because they gain profit without any effort and riba also will create other bad attitude like materialism, selfishness, arrogance and inhumane. Riba also will bring harmful towards the society, there are a few effects of riba on society. The first effects is usage of public transport would reduce and eventually quality of public support also would decrease. This is because society would convert into group of people always compete in luxury. Society also will become greedy because they only thinking to earn more money and forget about religious and family obligations.