FIQH

DEFINITION

MUAMALAH
EVIDENCES

ISLAMIC BUSINESS TRANSACTION

PILLARS

CONDITIONS

CHAPTER FOUR
QARDH
AL-HASSAN
AL-QARDH
DEBT
DISBURSEMENT

MAHYUDDIN KHALID  emkay@salam.uitm.edu.my

 CONTENT
î DEFINITION
DEFINITION î EVIDENCE
î PILLARS OF AL-QARDH
EVIDENCES î CONDITIONS OF AL-QARDH
î QARDH AL-HASSAN
PILLARS î PROCEDURES OF DEBT DISBURSEMENT

CONDITIONS

QARDH
AL-HASSAN

DEBT
DISBURSEMENT

2
 DEFINITION
î Qardh: Loan/ Debt
DEFINITION
î Literally:
EVIDENCES
Ü To cut something off; money given to the
borrower is called Qardh since portion
PILLARS
that has been cut off from the property
of the lender
CONDITIONS Ü Also known as al-Salaf or al-Dayn
î Technically:
QARDH
AL-HASSAN Ü Specific contract on transferring a
specified property to another party on
DEBT
DISBURSEMENT condition that a similar property will
be given back in return


3
 NATURE OF AL-QARDH
î The property can be any type of assets ranging
DEFINITION
from cash money, livestock or business
î It is called qardh, as through this contract a
EVIDENCES
certain part of the lender's property is cut off
and given to the borrower.
PILLARS
î Qardh refers to a contract through which a
CONDITIONS
lender gives a certain homogenous property
to a borrower on the condition that the latter
QARDH is responsible to return a similar property
AL-HASSAN
immediately upon a demand or at a specified
DEBT time.
DISBURSEMENT

4
 EVIDENCE
î Quran
DEFINITION 

EVIDENCES 

î Hadith
PILLARS Ü Narrated by Anas ibn Malik: The prophet saw said:
Ü I saw on the night of Isra’ something written on
CONDITIONS the gate of the paradise. Donation(sadaqah) is
rewarded 10 folds, and qardh is rewarded 18
QARDH folds.
AL-HASSAN
Ü I asked Gibrail: Why is it giving Qardh is better
DEBT
than donation? He replied: Because the
DISBURSEMENT receiver of the donation asked for it while he
actually has something, but the borrower will
not ask for loan except when there is a
necessity

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 EVIDENCE
î Ijma:
DEFINITION Ü The scholar had formed an ijma’ that Qardh is
permissible in Islam
EVIDENCES î This contract is classified under the category of contracts
pertaining to the utilization of usufruct (aqad al-
manfa’ah)
PILLARS
î There is no actual transfer or exchange of property
involved.
CONDITIONS

QARDH
AL-HASSAN

DEBT
DISBURSEMENT

6
 PILLARS OF QARDH
î Muqridh
DEFINITION Ü Creditor or Lender
î Muqtaridh
EVIDENCES Ü Debtor or Borrower
î Maal
PILLARS Ü Property
î Sighah
CONDITIONS Ü Ijab: Offer
Ü Qabul: Acceptance
QARDH 
AL-HASSAN

DEBT
DISBURSEMENT

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 FLOW OF AL-QARDH

DEFINITION

EVIDENCES

PILLARS

Ija b (Offe r)
(Ac c e p t a n c e )

CONDITIONS Maal
Qa b u l

(Property/ Asset)
QARDH
AL-HASSAN

DEBT
DISBURSEMENT

8
 CONDITIONS OF QARDH
î Ijab (Offer) and Qabul (Acceptance)
DEFINITION Ü Must be in a very clear and concise type of sighah
(offer & acceptance)
EVIDENCES î Ahliah
Ü Eligibility of the contracting parties (sane, adults
PILLARS & qualified)
î Quantity and Quality
CONDITIONS Ü Must be specified in quantity, weight & quality
Ü Items that are not mixed with other material
QARDH
AL-HASSAN

DEBT
DISBURSEMENT

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 QARDH AL-HASAN
î Literally
DEFINITION Ü Qardh means cutting off.
Ü Hasan means benevolence, beautiful, and
EVIDENCES kindness.
î The term al-qard al-hasan literally means beneficial loan,
PILLARS benevolent loan, gratuitous loan, and beautiful loan.
î A debt that is free from any type of predetermined
condition or promise to repay back more than the
CONDITIONS
original amount stated in the contract, but a special
token is sincerely given by the debtor to the lender
QARDH
AL-HASSAN during debt settlement not because any written
agreement or any predetermined provision or term
DEBT
DISBURSEMENT

10
 QARDH AL-HASAN
î Under Qardh al-Hassan, borrowers or debtor con
DEFINITION voluntarily give some extra amount more than the
loan principle provided that:
EVIDENCES 1. Not stated in the contract
2. Not have agreed upon
PILLARS 3. Not predeterminded in any manner by both
parties
CONDITIONS

QARDH
AL-HASSAN

DEBT
DISBURSEMENT

11
 EVIDENCE
î Quran:
DEFINITION î
î
EVIDENCES î
î
PILLARS î
î
CONDITIONS î The Quran verses explains Qardh al-Hassan between
Allah and the believers whereby it is actually an offer
QARDH from Allah for them to lend their energy, time and
AL-HASSAN
property in Qardh al-Hassan manner
DEBT î They will receive back all the things that they had
DISBURSEMENT sacrificed for the sake of Allah plus all extra rewards
that will be given to them

12
 EVINDENCE
î Hadith:
DEFINITION Ü Abu Rafi said: The prophet (s.a.w) borrowed a
young camel and then the camels from the
EVIDENCES zakat came to him. He ordered me to repay
the man his young camel.
Ü I said, I can only find a good camel in its seventh
PILLARS
year among the camels
Ü The prophet said, “Give it to him. The best of
CONDITIONS people are those who discharge their debts in
the best manner”
QARDH
AL-HASSAN

DEBT
DISBURSEMENT

13
 PROCEDURE OF DEBT DISBURSEMENT IN ISLAM

1. The debt transactions must be documented in a

DEFINITION written contract and binding agreement.
Ü Jumhur Fuqaha
EVIDENCES Ü The command to “put it down in writing” is
recommended command indicating the best
suggested practice; not compulsory
PILLARS Ü Supported by Abdullah Yusuf Ali that it is not
obligatory in law.
CONDITIONS Ü Contemporary scholars (Mohd Tahir Asyur & Sayid
Qutb)
QARDH Ü Original ruling for the command is mandatory
AL-HASSAN practice, that all debt must be documented
and not optional.
DEBT
DISBURSEMENT Ü Reason: Obviously understood especially if we
studied report on cases of false claims,
forgery, and fraud in the society which
intensifies in an almost alarming rate every
year.
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 PROCEDURE OF DEBT DISBURSEMENT IN ISLAM

Ü
DEFINITION Ü
Ü
Ü
EVIDENCES
Ü
Ü
PILLARS Ü
Ü
Ü
CONDITIONS
Ü Verses 283 indicate the “rukhsah” which
exempts parties involved from this
QARDH
AL-HASSAN
following ruling provided they can really
trust each other.
DEBT Ü By making writing debts compulsary, people
DISBURSEMENT will not have tendency of taking things for
granted from the beginning.
Ü The ruling will be benefiacial for creditors to
legitimixe their claims to the debtors
15
 PROCEDURE OF DEBT DISBURSEMENT IN
ISLAM
Ü The objectives (maqasid ) of this rulings:
DEFINITION
Ü Secure the right of all parties involved and
legitimize their claim from one another
EVIDENCES Ü Avoid any future dispute or argument
Ü Organize and standardize the procedure of
PILLARS muamalat in the business society
Ü Enable to distinguish between legal and
CONDITIONS illegal contracts

QARDH
AL-HASSAN

DEBT
DISBURSEMENT

16
 PROCEDURE OF DEBT DISBURSEMENT IN
ISLAM
2. The parties involved must not be reluctant or wary
DEFINITION in documenting every single loan transaction
regardless of its size or duration. The emphasis given
on documentation of debt has been justified as in
EVIDENCES
above verses:
Ü Aqsat
PILLARS
Ü It is preferable, equitable and fairer for all parties
in sight of Allah
CONDITIONS Ü Aqwam
Ü A documented testimony or evidence is more
QARDH reliable and consistent than oral testimony
AL-HASSAN which based solely on memory
DEBT
Ü It can prevent any suspicion or doubt on the
DISBURSEMENT contract itself, or any claim made by any
parties

17
 PROCEDURE OF DEBT DISBURSEMENT IN
ISLAM
3. The parties involved must provide witnesses to
DEFINITION certify the debt contract with the following
conditions:
EVIDENCES Ü The witnesses must be either 2 males or 1 male
and two females
Ü The witnesses must be reliable and approved or
PILLARS
accepted by both parties. Reliability is based
on the track record of the witnesses.
CONDITIONS Ü The witnesses must not refuse to testify when
they are called upon by disputed parties or by
QARDH the relevant authorities
AL-HASSAN

DEBT
DISBURSEMENT

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 END OF CHAPTER

DEFINITION

EVIDENCES

PILLARS

CONDITIONS

QARDH
AL-HASSAN

DEBT
DISBURSEMENT

19