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Avoiding Ribā: Credit and Custodianship in Nineteenth- and Early-Twentieth Century ḥaḍramawt

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This essay examines a little-known economic institution known as ʿuhda sale which was highly elaborated in the ḥaḍramawt region of southern Arabia, where it was used to facilitate the availability of credit by allowing people to benefit from extending credit without breaking the Qurʾānic prohibition of Ribā. After considering the history of the practice in ḥaḍramawt and controversies associated with it, I analyze how the transactions worked and who participated in them, as reflected in nineteenth- and twentieth-century contracts. In addition, evidence culled from contemporary fatāwā shed light on some of the questions and problems which arose in the course of these transactions. The ʿuhda transaction in ḥaḍramawt illustrates the development of a utilitarian economic institution through the combined influences of local usage based on practical needs and local juristic decisions as to religious legitimacy. The transaction exemplifies the flexibility of the local legal system in response to economic need and social practice. It also illustrates the degree to which people of different genders, ages, and social backgrounds participated in financial transactions in this society.

Affiliations: 1: University of Texas at Austin


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