Islamic Relief believes that unfair and crippling debt is trapping individuals, communities and countries in poverty.

As a result of the massive debt repayments that poor countries are forced to make, there is less money available for governments to provide their citizens with basic services such as education and healthcare.

In Islam, loans can be given to finance economic activity or to mitigate a period of economic hardship. However, all loans are given on the basis of an equitable, risk-sharing partnership between lender and borrower, where reward and failure are shared by both parties. Because interest compounds the difficulties faced by those in debt, Islam prohibits charging or paying interest. Furthermore, there is no risk sharing in the international banking system.  The bulk of loans were given to developing countries irrespective of how they were to be spent and interest rates have subsequently spiralled out of control.

Islamic Relief supports economic development for poor communities and works with them to provide healthcare, education, water and sanitation and promote sustainable livelihoods. However, long-lasting changes can only be made if the root causes of poverty are addressed, which includes undue indebtedness. As an aid agency based on Islamic humanitarian principles and an agency committed to relieving extreme poverty, we believe that it is our duty to advocate for change in order to assist countries crippled by international debt. To overcome this we support four key advocacy demands:

·        Bankruptcy procedures are created for countries that are unable to repay their loans

·        All un-payable debt is cancelled by fair and transparent means, and the resources that are freed are monitored to ensure they are used for social welfare purposes

·        All ‘odious’ debt is cancelled

·        Trade justice; creditor countries and institutions should re-evaluate their past and present lending practices to avoid future undue indebtedness