SEATTLE – When he bought his car two years ago, Javed Ahmed saved up enough money so he could pay for it with cash. And every month, the senior analyst at Voyager Capital, a venture firm in Seattle, pays off his credit-card balance so he doesn’t have to pay interest. Now, at 29, Ahmed wants to buy his first home. But as a Muslim, whose religion prohibits earning or paying interest on borrowed money, he faces a dilemma common to observant followers of the nation’s fastest-growing religion: Can he buy a home without angering God? “I’m not going to save up money to buy a house,” Ahmed concedes. That’s hardly practical — at least not in Seattle. So “right now I’m on the fence,” he said. “I’m not sure what the right thing is to do.” Avoiding interest, or riba as it’s known in Islam, confounds the realities of Western society, where few people use cash to make purchases and Visa and MasterCard rule the day.
There’s strong dissension among Muslims over how deep this ban on interest should reach: Are security investments allowed — stocks and bonds? What about retirement accounts or savings that yield a return? The battle between finance and faith is not limited to Islam; the restriction on interest has roots in many religions, including Christianity and Judaism, to ensure that the wealthy don’t take unfair advantage of the poor. Only Islam still adheres to this strict interpretation — at least in the United States. It leaves Muslim followers who wish to pursue the American Dream with just a few options: Some, like Ahmed’s parents, felt they had no choice but to take on a traditional mortgage when they bought their home in Portland, where he grew up. Others save for years until they have enough cash to buy a home outright. (MORE)