The Endless Credit: an Islamic Economic Law Perspective

Abstract

Due to the perception that installment payments are simpler, buying and selling credit is becoming more and more common in rural communities. However, it is unknown when the custom of credit payments in Kedungbanjar Village would expire because the seller neither specifies the length of the payment period nor the nominal installment amounts. The purpose of this study is to examine the factors that lead sellers to fail to disclose credit payment durations. and seeks to examine how the practice of unending credit payments is seen from the standpoint of sharia economic law. A conceptual approach and a sociological approach were both used in this empirical legal research. The findings of the study indicate that a seller's marketing tactic is to withhold information about payment conditions and minimal installments. When the credit has been repaid, buyers can simply conduct credit transactions for other essentials, which helps buyers who feel assisted by the lack of payback targets and small installment payments. Essentially, it is acceptable and legal to buy and sell on credit as long as the pricing is the same for both cash and credit and the length of the payment period is made explicit. In the meantime, it is against sharia economic law for dealers to covertly increase prices during payment periods without disclosing the timing.