The interest payments paid by the world: A $13 Trillion Drain on the Global Economy
In 2022, global interest payments were estimated to have reached an astronomical $13 trillion, a staggering figure that represents 15% of the world’s entire GDP. But what does this really mean for everyday people?
For the poor and middle class, it means a direct transfer of wealth from their pockets to those who already control vast financial assets. The very structure of the interest-based system ensures that those who are least able to afford debt—families taking out mortgages, students burdened with education loans, or individuals financing medical bills—are funneled into paying exorbitant sums to the wealthy elite, who benefit from owning the capital they lend out.
Interest doesn’t create wealth; it redistributes it upward. When a family borrows to buy a home or a student takes out a loan for their education, they enter into a cycle where they pay back not just what they borrowed, but substantial interest on top of that. Who benefits from this? It’s the lenders—often wealthy individuals and institutions—who can afford to deploy their capital in financial assets. The wealth generated from interest payments flows to the top, widening the gap between the rich and the poor.
Over the past several decades, income inequality has ballooned globally. According to Oxfam, the richest 1% of wealth have accumulated nearly 66% of new wealth since 2020. This dramatic disparity has only been exacerbated by the interest-driven financial system, where the wealthy can continuously grow their fortunes through lending, while the poor are left paying the price—literally. The rich get richer, not through productive activity or innovation, but by collecting interest from those who can least afford it.
The global interest burden is not just a financial number. It is a mechanism of wealth extraction that locks billions into a cycle of debt, while those at the top enjoy the compounded returns on their capital. Interest perpetuates inequality, ensuring that the gap between the “haves” and the “have-nots” continues to widen year after year.
Whilst interest is said to fuel growth, this blog highlights the true cost of this ‘growth’ on society. We believe a growing economy should benefit all those in society, not only a select few.
When we make choices about interest in consuming or benefitting from it, we are directly and indirectly contributing to a world with real consequences.
Wahed’s vision is to create a world free from interest. We believe that growth should come from real economic activity, and wealth should be built sustainably, from investing in real assets. We believe by providing professional grade investments that are always free from interest, we aim to create long-term wealth for our clients without sacrificing their faith and values.
Join the 400,000 strong community that believes in this vision too and become an investor with Wahed today.
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As with any investment, a Wahed Invest Ltd investment puts your money at risk, as the value of your investment can go down as well as up. The tax treatment of your investment will depend on your individual circumstances and may change in the future. If you are unsure about whether investing is right for you, please seek expert financial advice.
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