ULoan == Riba ??

When Ufone started its ULoan service, i was all over it. A customer friendly service in which Ufone loans you an amount without charge which is enough in a time of need. However soon enough, i got too used to it, i was loaning credit even when not needed. It was as though the loan was a left over part of my own credit. Situations came when i needed to make calls but i was out of both my credit and Uloan!

For Ufone however, what may have been a customer friendly service at start turned out to be a big money making success. People loaned credit and used it ultimately to avail Ufone’s own network, from which Ufone earned its profit. Ten rupees to a single customer maybe nothing, but through millions of customers combined, it made a huge sum and a huge profit.

Following this success, Ufone has has now increased its Uloan to Rs. 15, injecting a further 5 rupees into its own network. It has also added an additional charge of Rs .5 + tax. Increasing the loan amount may not be as objectionable, but putting charges on the Loan….

Wikipedia Defines Riba as “any loan which involved an increase in repayments.”  Technically, Ufone is charging a fees for its service, but since the service is in effect the giving of a Loan, it is in my view charging RIBA. The Irony here is,the scheme has been introduced as a special Ramazan offer!!

As Riba is considered amongst Seven Heinous Sins (Al-Saba al-Mubiqat – السَبعَ الموبِقاتِ), and considering Uloan has in effect become a source of Riba, we should not be using this service unless a better explanation is available.

For further Details about the Uloan service, click here.