“O you who have faith! When you contract a loan for a specified term, ...take as witness two witnesses from your men, and if there are not two men, then a man and two women —from those whom you approve as witnesses— so that if one of the two defaults the other will remind her.\\\\\\\" Qur’an 2:282) More »
It is about planning and action. It is about attitude and management. It is about prayer and productivity. It is about acquiring streams of lawful income. It is about self-esteem and financial freedom. It is about spiritual-physical equilibrium. It is about self-empowerment to empower others. More »
A modified transcript of 20-minute presentation of the paper “Debt Management in Behavioral Economics and Personal Finance as Reflected in Sahifah al-Sajjadiyyah” at the 3rd International Conference on Thoughts on Human Sciences in Islam, Jakarta, Indonesia, November 16, 2016.)
Respected elders, distinguished scholars, and brothers and sisters in Islam as well as in humanity! Let me greet you all with the greetings of peace: Salamun ‘alaykum wa rahmatullahi wa barakatuh!
(I’m making this presentation while assuming that all these many seats are filled with both the jinn and human beings – both the sleeping and the awake. In this unholy hour when everybody wants to sleep, I am uniquely fortunate enough to be surrounded by two esteemed Mesbahs (alluding to Dr. Ali Mesbah and Dr. Mohammad Mesbahi as fellow presenters in the same plenary session). As we all know, mesbah in Arabic, Persian and other languages means ‘lamp’. Since I believe I’m illuminated enough by two lamps, I’m optimistic that you will not mistakenly see me as a pillow or blanket.)
At the outset, let me take this opportunity to extend my heartfelt gratitude to the conference organizers, particularly the Director of the Sadra International Institute, and generally to all the members of the steering committee down to the drivers and guides. This is my first to come to Indonesia, although I may look like an Indonesian or even more ‘Indonesian’ compared to some Indonesians. I come from Mindanao, the land of promise and the bastion of centuries-old struggle for self-determination in this part of the world.
Before laying down my paper’s Statement of the Problem, let me first make some introductory remarks about behavioral economics and personal finance as well as about homo economicus vis-à-vis homo islamicus. I shall also clarify the kind of ‘debt’ which is the concern of this paper. After giving you the Statement of the Problem, I shall address the four secondary questions one by one and finally make a conclusion.
What is lacking in both behavioral economics and personal finance is the role of the soul or spirituality which is a central theme in a monotheistic worldview. In classical economics, as in related academic disciplines, the economic actor is assumed to be an unboundedly rational, will-powered and selfish agent in which rationality is defined in terms of material gain and profit, without taking into account a notion of spiritual dimension.
Behavioral economics comes to the fore to argue that psychological, social and emotional factors sometimes stand in the way of economic actor’s tendency for rationality in making an economic decision. Yet, there is still no recognition of any place for soul or morality, as psychology is assumed to be ‘the study of the mind’. (In Islam we call it ‘ilm al-nafs which means ‘study of the soul’.
Statement of the problem
This paper attempts to examine the case of debt management in behavioral economics and personal finance through the lenses of Sahifah al-Sajjadiyyah which is a classical Islamic text on supplications. It is argued that by advancing the concept of homo islamicus and asserting the role of the soul in explaining human behaviors, the monotheistic worldview of Islam can shed more lights on the roots of economic or financial decisions, such as incurring debt, that are to be made by an economic agent.
In particular, this paper endeavors to address the following questions:
- What is the definition of debt, in general, and consumerist debt, in particular?
- What is ‘debt’ in Islamic textual sources and history?
- What is Sahifah al-Sajjadiyyah and its Supplication 30 about?
- What is the description of ‘debt’ in Sahifah al-Sajjadiyyah Supplication 30 and its recommended steps or measures toward freedom from debt?
Islamic jurisprudence (fiqh) distinguishes dayn (debt) from qard (loan), considering the former broader in connotation and covers the latter in its conceptual umbrella. Dayn includes any kind of transaction such as ‘settlement of claim’ (sulh), leasing (ijarah), buying and selling, and the like. (See Manifestations of the All-merciful, p. 63)
In this paper, our concern is a broad type of debt we call ‘consumerist debt’. When as we say ‘consumerist debt’ we mean that kind of debt which is motivated by consumerism understood in its negative sense. It is “the selfish and frivolous collecting of products or economic materialism.” Financial advisers would tell you, “You incur consumerist debt when you buy something you don’t need in order to impress people you don’t like with money that you don’t have!”
Debt in Islamic sources and history
Dayn (debt) is mentioned in Islamic sources (Qur’an, Traditions, Supplications, and Jurisprudence) and history in various ways.
In Chapter 33, verse 23, the Qur’an urges the faithful to fulfill their obligations and pledges including the repayment of debt. In Chapter 9, verse 60, it is mentioned that [obligatory] charities (zakāt) are meant, among others, “for [the freedom] of] the slaves and debtors.”
Meanwhile, there are traditions (ahadith) which indicate that debt sometimes stands in the way of spiritual progress. Some traditions condemn indifference in repaying one’s debt – and equates it with theft. There are also traditions that give warning for the spiritual consequences of habitual incurring of debt.
In supplications (ad‘iyyah) transmitted to us, there is an explicit prayer for the repayment of debt. A very good example is Sahifah al-Sajjadiyyah’s Supplication 30 (Imam Zayn al-‘Abidin’s supplication for help in repaying debt) which is the main concern of this paper. Another example is the famous daily supplication during the month of Ramadan, which includes this line: “O Allah, facilitate the payment of every indebted one!” There are also transmitted supplications one of whose benefits is the repayment of debt for one who recites them. Among these supplications are al-Mashlul, Yastashir, and al-Mujir.
Muslim schools of jurisprudence (fiqh) are unanimous in the ruling that the debtor who cannot pay his or her debts is one of the seven rightful recipients of zakat (alms-tax); therefore, he or she is given of the zakat to settle his or her debts. Also, when a Muslim dies, one of the four duties which need to be performed by his or her heirs is the payment of his or her debts.
Regarding debt in history, let me just cite two examples. As Imam Husayn made an encampment in the plains of Karbala’, he purchased the site for the would-be graves of him and the other martyrs so as not to be indebted to the owner after the tragedy. Earlier to that, when Muslim ibn ‘Aqil was asked to disclose his wishes before getting executed, the last of his three wishes is the selling of his coat of arm so as to pay for the piece of land where he had to be buried.
These two instances show prominent figures’ avoidance of incurring debt as much as possible and their firm resolution to repay once it is incurred.
In sum, debt has been an important topic in Islamic sources (Qur’an, hadith, supplication, and jurisprudence) and history.
Sahifah al-Sajjadiyyah and its Supplication 30
Literally means ‘the Book of Sajjad,’ Sahifah al-Sajjadiyyah is a collection of supplications composed by Prophet Muhammad’s great grandson, ‘Ali ibn al-Husayn (38 AH/658-9 CE – 95 AH/713-4 CE), known as Zayn al-‘Abidin (`the Adornment of the Worshippers’) and ‘Al-Sajjad’ (‘the one who constantly prostrates (sujud) in prayer’). Sahifah al-Sajjadiyyah includes fifty-four supplications which make the main body of the text and the additional supplications which make up the fourteen addenda (including the prayers for the days of the week) and the fifteen munajat or `whispered prayers’. It is the oldest extant prayer manual in Islamic sources and one of the most seminal works of Islamic spirituality of the early period of Islam.
Supplication 30 of the 54 main supplications is Imam al-Sajjad’s supplication for help in repaying debt.
Sahifah al-Sajjadiyyah’s description of debt
At the outset, Imam ‘Ali al-Sajjad thus supplicates:
“O God, bless Muhammad and his Household and release me from a debt which makes me lose face, confuse my mind, disrupts my thinking, and prolongs my occupation with attending to it! I seek refuge in Thee, my Lord, from worry and thought about debt, from the distraction and sleeplessness of debt; so bless Muhammad and his Household and give me refuge from it! I seek sanctuary in Thee, my Lord, from debt’s abasement in life and its ill effects after death, so bless Muhammad and his Household and give me sanctuary from it through a bountiful plenty or a continually arriving sufficiency!”
This initial part of the supplication is a window to Imam ‘Ali al-Sajjad’s description of debt and its potential maladies and repercussions upon the debtor. Among others, the Imam describes debt as: (1) something that may humiliate a person (debtor), (2) mentally disturb him, (3) emotionally burden him, and (4) a source of disgrace for him in this world and in the Hereafter.
Sahifah al-Sajjadiyyah’s steps or measures of freedom from debt
In this brief and specific supplication, certain steps or measures toward freedom from debt can be alluded to, and these are the following:
- Sincere supplications for repayment of debt
For any concern or problem of the believer – material or spiritual – he is supposed to extend his arms to the Source of Power and Knowledge, the Essence of Beauty and Grandeur. For relief from the burden of debt, one must sincerely pray and implore to his Lord and perform various acts of devotion.
- Having streams of lawful incomes
These parts of the supplication – “Give me sanctuary from it (debt) through a bountiful plenty or a continually arriving sufficiency,” “hold me back through Thy gentleness from squandering,” and “allow me to attain my provisions through lawful means” – may allude to having streams of lawful incomes as a very obvious step toward freedom from debt.
- Living below one’s means
This part of the supplication – “prevent me from extravagance and excess; put me on the course of … moderation” – may suggest an instruction to live below one’s means by maintaining moderation and avoiding extravagance and excess in spending.
- Avoiding Any Possession Causing Pride and Related Moral Vices
This segment of the supplication – “take away from me any possession which will bring forth pride in me, lead to insolence, or drag me in its heels to rebellion” – leads us to another very practical step to freedom from debt; that is, shunning any possession or item which belongs to the category of ‘wants’ rather than ‘needs’ and which usually causes pride and related moral vices to the owner.
- Spending for Wholesome Endeavors Including Charity
Elsewhere in the supplication, we read: “Put me on the course of generous spending…; teach me excellent distribution… direct my spending toward the gateways of devotion… O God, make me love the companionship of the poor and help me be their companion with excellent patience!”
These portions of the supplication direct us to a significant step toward freedom from debt and a way to ample sustenance; that is, to spend for wholesome endeavors of devotion including alms-giving and spending for charity. As we all know, Islamic sources affirm the unseen or spiritual connection between the giving of charity and increase in sustenance.
From the above discussion, the following conclusions can be drawn:
- Incurring of consumerist debt is just a symptom of the root of the problem, and that is greed which is one of the vices of the Power of Desire (al-quwwat al-shahwiyyah);
- Apart from being a symptom of a moral malady, incurring consumerist debt also brings about other things with equally dire spiritual consequences, viz. (a) personal humiliation, (b) mental disturbance, (c) emotional burden, and (d) disgrace in this world and in the Hereafter;
- As shown in our examination of Supplication 30 of Sahifah al-Sajjadiyyah, the supplications handed down to us are full of pristine ideological doctrines and practical guidelines.
- Supplication 30 of Sahifah al-Sajjadiyyah is not only a text of prayer for help for the repayment of debt but also contains practical steps or measures toward freedom from debt;
- A Muslim – that is, homo islamicus – is supposed to exemplify a kind of morality or lifestyle which is a manifestation of perfect regulation of the four powers or faculties (quwwat) of the soul, and the absence of the various vices of those powers, those of the Power of Desire in particular.
- Most important of all, the debt management laid down by Supplication 30 of Sahifah al-Sajjadiyyah exudes new conceptual insights into both behavioral economics and personal finance, and central to them are the concepts of homo islamicus and ‘Islamic rationality’ with the two distinct fundamental elements of a broader concept of success and time scale of the economic agent’s behavior.
Thank you! Terimah kasi banyak!
[MindaViews is the opinion section of MindaNews. Mansoor L. Limba, PhD in International Relations, is a writer, educator, blogger, chess trainer, and translator (from Persian into English and Filipino) with tens of written and translation works to his credit on such subjects as international politics, history, political philosophy,intra-faith and interfaith relations, cultural heritage, Islamic finance, jurisprudence (fiqh), theology (‘ilm al-kalam), Qur’anic sciences and exegesis (tafsir), hadith, ethics, and mysticism. He can be reached at email@example.com, or http://www.mlimba.com and http://www.muslimandmoney.com.]
On returning from journey of Hajj “pilgrimage”, a man related his and his Companions’ experience who accompanied him, to Imam Sadiq (‘a). He stirred and admired them, particularly one of his fellow-travelers: “How noble was he. We are proud of accompanying such an honorable man. He was praying continuously. No sooner did we stop at a place immediately than he would part from us, seek a corner, spread his prayer mat, and engage himself in prayer and worship.
The Imam (‘a) asked: “Then, who was looking after his affairs? And who was tending his animal?
He replied: “Of course, we were. We had the honour to be at his service. He had nothing to worry about; he used to engage himself in his holy affairs.”
The Imam (a’) replied: “Therefore all of you were better than him.”
Financial Lesson of the Story:
1. Not to rely on others even for a small thing.
(Source: Murtada Mutahhari, THE NARRATIVES OF THE VERACIOUS)
(Photo via wikihow.com)
Mansoor Limba, MUSLIM COUPLE AND MONEY: 8 PRACTICAL FINANCIAL TIPS FOR NEWLYWED MUSLIM COUPLE (MuslimandMoney.com, 2016), $2.99.
Published in both Amazon.com and Smashwords.com platforms, the eBook is a personal finance guide that reveals 8 practical financial tips for newlywed Muslim couples to help them attain financial freedom and happy marriage.
This title is part of the Muslim and Money Book Series. The other titles are “Muslim Kid and Money: 12 Financial Stories for Muslim Children” and “Muslim and Debt: 5 Practical Steps to Freedom from Debt,” which will be published soon, insha’ Allah.
Get your copy now!
Mansoor Limba, MUSLIM COUPLE AND MONEY: 8 PRACTICAL FINANCIAL TIPS FOR NEWLYWED MUSLIM COUPLE (MuslimandMoney.com, 2016).
It is currently available as pre-release and sample pages can be downloaded free at Smashwords.com.
This title is part of the Muslim and Money Book Series. The other titles are “Muslim Kid and Money: 12 Financial Stories for Muslim Children” and “Muslim and Debt: 5 Practical Steps to Freedom from Debt.”
The corpus of hadith has a lot of transmitted supplications recited every after the daily prayers during the month of Ramadan. One of these supplications is a short yet concise one whose English translation is as follows:
In the Name of Allah; the All-beneficent, the All-merciful.
O Allah, gladden the people of the graves,
O Allah, enrich every poor person,
O Allah, satisfy every hungry one,
O Allah, clothe every unclothed one,
O Allah, help every debtor pay his debts,
O Allah, relieve every distressed one,
O Allah, return every traveler (to his home),
O Allah release every prisoner,
O Allah, correct every wrong in the affairs of the Muslims,
O Allah, cure every sick one,
O Allah, ease our poverty by Your wealth,
O Allah, change our evil state to a good one through Your excellent state,
O Allah, relieve us of our debts, and help us against poverty.
Surely You have power over all things.
What draws our attention in this brief supplication is the fact that contrary to the common notion, most of the things asked for have something to do with material or physical welfare. Most interesting to note is the emphasis on the repayment of debt both at the beginning and the end of supplication.
This, once again, shows the multi-dimensional nature of fasting in Ramadan, and among its benefits are the lessons in personal finance that can be derived from it.
MAKATI CITY (8 May) – As a financial literacy advocate and blogger, I was quite privileged to be invited last Friday (May 6) in the first forum on “The Flow of Deposits in the Mindanao Banking System: Exploring Alternatives” hosted by the Joint Ateneo Institute of Mindanao Economics (JAIME) held in Ateneo de Davao University, Davao City.
Covered by the British Broadcasting Corporation (BBC), the forum was attended by representatives from the Tokyo University, Department of Trade and Industry (DTI) – Region 11 Office, Mindanao Development Agency (MinDA), Mindanao Business Council, Landbank of the Philippines, Union Bank, Banco de Oro (BDO), Development Bank of the Philippines (DBP), Philippine National Bank (PNB), MMC, Davao City Chamber of Commerce and Industry, Ateneo de Manila University, Xavier University, various offices of Ateneo de Davao University (Academic Vice President Office, University Research Council, Finance Office, Al Qalam Institute for Islamic Identities and Dialogue in Southeast Asia, School of Business and Governance, and the Economics Department), rural banks, and microfinance institutions, among others.
Focused mainly on the constituents of Mindanao’s dualistic banking system, viz. (1) branches of the universal and commercial banks (UCBs) with head offices in the National Capital Region (NCR) and (2) branches and head offices of the locally-oriented thrift banks and rural and cooperative banks (TB-RCBs), the research presentation by JAIME Director, Dr. Germelino M. Bautista, attempted to answer the following questions:
(1) What is the overall performance of the dualistic banking system in Mindanao, and what are its trajectories?
(2) How different are the deposit mobilization capacities and loan provisioning roles of these banks and what do these differences imply for the banking system and economic development of Mindanao?
(3) What options are available to address the limitations in capacities and roles of the UCBs and TB-RCBs?
As Prof. Bautista argued, a vision or alternative future for the TB-RCBs of Mindanao might entail the following conditions:
(3.1) Improve the capacities of existing TB-RCBs, strengthen their local community orientations, and determine what can further promote the growth of rural and cooperative banks;
(3.2) Tap the currently underserved and unbanked population, and further expand the community-based microfinance operations of TB-RCBs to promote the livelihood of the self-employed and small businesses and eventually generate and mobilize savings from new client depositors;
(3.3) Establish more Islamic finance intermediaries and apply shari‘ah financial instruments that aim to generate higher incomes and mobilize savings in poor Muslim communities; and
(3.4) Mobilize deposits from both Muslim and non-Muslim cooperatives for their own rural cooperative and Islamic banks.
In the Q & A session, the following points came to the fore:
* There has been available money for loan in the banks and microfinance institutions, but the usual problem has been the failure of most borrowers to repay their respective loans.
* The local government units (LGUs) could do a lot in improving the flow of deposits in the banking system.
* Any success in encouraging the potential depositors to deposit their money to a commercial bank or a rural bank, as the case may be, is also reflective of our success in encouraging them to develop the habit of saving and later on, investing, as well as to cultivate their entrepreneurial mindset. In other words, financial literacy of the individual – the potential depositor and loan applicant – is a preliminary step in banking.
* There is considerable interest in knowing more about shari‘ah-compliant instruments for generating higher incomes and mobilizing savings.
As such, these points could be viable candidates as the next research agenda of the nascent Joint Ateneo Institute of Mindanao Economics or JAIME.
The caravan being tramped for hours, tiredness overwhelmed the riders and the animals. As soon as they reached an oasis where there was water, they had their camels kneel down. The Holy Prophet (s), accompanying the caravan, made his camel kneel down and dismounted from it. All were rushing to reach the water to prepare for the preliminaries of prayer, dismounting from the camel, the Holy Prophet (s) also made his way towards the water.
After covering a certain distance, without speaking to anyone, he (s) returned back to his camel. To the surprise of his Companions, they thought he (s) was not pleased with this place and will order them to set out?! Lending the ears to him, in full attention, they looked forward to hear his order. The Companions were astonished and amazed when they saw the Holy Prophet (s) reach his camel, pick up tie and bind the knees of it; then he (s) returned back towards his first destination.
The exclamation rose up in between the Companions: “O Messenger of Allah! Why did you not command us to do that, and you bothered yourself while we are all proud of being at your service?”
The Holy Prophet (s) replied: “Do not ever ask for help from others for your own affairs and do not count upon others even if it would be a toothpick.” (Kahl al-Bassar, p. 69)
Source: Murtada Mutahhari, THE NARRATIVES OF THE VERACIOUS, Story 4.
Financial Lessons of the Story:
- Not to rely on others even for a small thing.
MAKATI CITY (MindaNews / 13 March) – (A message delivered at the wedding reception of the writer’s high school batchmates on March 12, 2016.)
The first time I read your wedding announcement on Facebook, this was the first thing that came to my mind: contrary to the clichés that it is an avenue to do the wildest things undone before and having the tendency to disrupt family ties, high school batch reunion is meant to strengthen family ties, foster cooperation among old friends and render services to the community.
Akmad and Albeah, you are a living proof that high school reunion is indeed meant to build families.
Let me take this rare opportunity to share some thoughts on this new stage of your life journey. I shall not touch on the philosophical, religious and legal aspects of marriage as these are expected to have been tackled in the khutbat al-nikah (wedding sermon) and marriage counseling sessions you were supposed to attend.
Instead, let me focus on an aspect which is hardly given attention, yet a daily affair; that is, personal finance or money management.
On a daily basis, we handle money yet we hardly think of the need to manage it. Or, we assume that using it is identical with managing it. Or, to think of managing it is tantamount to becoming materialistic. We always say, “Bahala saging basta loving,” yet many marital conflicts and splits are money-related; either the lack of it or the improper use of it.
Personal finance experts give this formula: Income minus Savings equals Expenses. This means that as soon as we get our income, we immediately allocate a certain amount for savings before spending what we earn for the (other) expenses.
This is the opposite of the formula we usually follow: Income minus Expenses equals Savings. What usually happens is that since the amount of our expenses is equal to, if not more than, that of our income, nothing remains as savings. In fact, we often incur debts because our income is not enough for our expenses.
But by following the experts’ formula, the amount for savings is automatically allocated by considering it to be part of the expenses, nay the most priority. And after allocating the amount for savings, we adjust our expenses (lifestyle) by following the corollary precept of “spending below your means.”
The first element in the above formula is ‘income’. No doubt, multiplying the streams of income is the primary recipe for financial self-sufficiency. The key is just to identify your passions – the things that you enjoy doing – and then look for the ways to monetize them.
Just give real value or love to the product or service you want to offer, and then profit will follow. Simply put, ‘passion’ plus ‘value’ equals ‘profit’.
The second element in our formula is ‘savings’. Saving is to set aside money to be spent later, and we do and must save for many reasons, viz. unforeseen (emergency) and future (retirement) expenses. But letting our money sleep for a while (saving) is not smart enough because of inflation. If the annual inflation rate is 4 percent, it means that the purchasing power of our P100 today is just P96 tomorrow.
So, we need to invest our saved money. Investing is to let our saved money grow and not just sleep. It is to let our money work for us while we are sleeping.
There are many available shari‘ah-compliant investment instruments you can choose: business venture, real estate, mutual fund, stock market, etc. Be that as it may, don’t forget the primary investment: to invest in yourselves; to invest in the enhancement of your knowledge and skills in everything you are passionate of.
The last of the three elements in the formula is ‘expenses’ but it does not mean that it is the least important. In fact, managing it is as important as managing ‘income’ and ‘savings’ to ensure a financially successful marriage life. Multiplying streams of income must always be coupled with keeping one’s lifestyle below the income level.
Among the tips in managing one’s expenses are to distinguish ‘needs’ from ‘wants’ and to give priority to the former in matters of spending, to look for ways to save in spending, to separate ‘shopping day’ from ‘buying day,’ and to list what you must buy before buying, among others.
The details of each of these elements in the formula will be given in the book I’m currently writing – “Muslim Couple and Money: Personal Finance for Newlywed Muslim Couple.”
In closing, we, your batchmates, wish you financial success in the new stage of your life journey!