Contexts of the Early Creation of Islamic Trading Partnerships: The Ibāḍī and Sunnī Legal Casuistry

This article explores how medieval Islam understood the Qurʾānic
prohibition of usury and how this prohibition influenced practices
of trade and commerce. I argue that medieval Islamic
jurisprudence reacted to the Qurʾānic prohibition of usury by
developing a set of legal prescriptions that carved out a space for
the extensive use of mercantile credit, which was crucial to the
rise of medieval Islamic commerce and entrepreneurship. The
shortage of cash, together with the risks of transporting large
sums of money across perilous routes, also contributed to the
growth of a sophisticated system of credit instruments. My
research is mainly based on Ibād. ī sources, but I will provide some
comparison with Sunnī (in particular H. anafī and Mālikī) sources
concerning the legal casuistry.