On no soul does Allah Place a burden greater than it can bear
(Surat al-Baqara: 286)
This article was written by Shehzada Dr Aziz bhaisaheb Qutbuddin in 2017.
In a recent Fatemi Dawat Islamic Finance Seminar, one of the questions asked was, “How much leverage is appropriate? If I have 100 rupees, how much business should I do with it: 50 rupees, 100 rupees, 200 rupees - how much?” Shehzada Dr. Abdeali Bhaisaheb Saifuddin, the head of the seminar, replied and said that he himself had presented this same question to Syedna Taher Fakhruddin TUS. Syedna referred to the ayat “On no soul does Allah Place a burden greater than it can bear” (Surat al-Baqara: 286). In the context of finance, Imam AS has interpreted this to mean that one should expose oneself to less than what one can bear. Maulana said therefore, the amount of leverage should be less than the ability to bear a loss. If anything more is leveraged it enters the realm of excessive speculation, which is haram.
The ayat uses the word ability (wus’) which is slightly different than capacity (taaqat). Syedna Taher Saifuddin RA said that “ability” is less than “capacity.” If one has the capacity to run 10 kilometers but he would be exhausted and depleted at the end of it, then his ability is probably around 8 kilometers. If he runs till his capacity he may not be able to run again the next day and may even hurt himself in the process. But if he runs as per his ability, the next day he will still have energy to run again and eventually he will become stronger through sustainable training.
Our Hudaat Kiraam guide us in every aspect of our life. They show us how to lead a balanced life. Syedna Fakhruddin has clearly showed us how the general principle of working within one’s ability can be applied to financial planning with his answer to the question on leverage. Just as important as the divine text is its correct interpretation and application. We are fortunate to receive Syedna Fakhruddin’s continuance guidance in this and all other matters of life.