---
title: "Islamic Finance in a Minute, episode 1: Riba"
type: podcast episode 1
published: 2026-10-04T02:00:00.000Z
url: https://islamicopenfinance.com/podcasts/term-riba
audio: https://islamicopenfinance.com/podcasts/audio/term-riba.mp3
voices: synthetic (AI-generated speech)
---

# Islamic Finance in a Minute, episode 1: Riba

> An increase over principal that Shariah prohibits: extra stipulated on a loan, or an unequal exchange of certain like-for-like goods. (Shariah fundamentals)

## Transcript

**Amina:** Hi! Islamic Finance in a Minute, episode 1. Today's term: Riba. Let's start with the word everyone hears first. What exactly is riba?

**Yusuf:** Riba is an increase that Islamic finance prohibits. The classic case is a loan where the lender stipulates getting back more than was lent, simply because time has passed.

**Amina:** So any profit on money is riba?

**Yusuf:** No. Profit from a real sale, a lease or a partnership is allowed. What is prohibited is a return stipulated on a loan itself, or an unequal swap of certain like-for-like items, such as gold for more gold.

**Amina:** And that's why Islamic banks use contracts like murabaha and ijarah?

**Yusuf:** Exactly. Instead of lending at interest, the bank buys and sells, leases, or invests as a partner. Each of those carries its own risk, and that risk is what justifies the return.

**Amina:** The full definition and related terms are in the IslamicOpenFinance™ glossary. Our voices were made with AI; see you tomorrow!