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 Ibāḍī sources, but I will provide some comparison with Sunnī (in particular Ḥanafī and Mālikī) sources concerning the legal casuistry.