Fiqh al-Istidanah wal-Qard — Debt and Lending in Islamic Law: The Qard Hassan as the Only Islamically Permissible Loan Form, the Prohibition on Any Benefit to the Lender, the Rights of Creditors in Recovery, and How Islamic Finance Handles Consumer Credit Without Interest

Fiqh al-Istidanah wal-Qard (فِقهُ الاستِدَانَةِ وَالقَرض — Jurisprudence of Debt and Lending; *istidana*: to go into debt, to borrow; *qard*: a loan; the Islamic lending framework: in Islamic law, a loan [qard] is categorically a charitable/benevolent act — not a commercial investment instrument; the foundational rule: 'every loan that generates a benefit [for the lender] is riba' [kullu qard jarra naf'an fa-huwa riba]; this rule is the foundation of Islamic finance's entire project; qard hassan: the only permissible loan form; literal meaning: 'beautiful/good loan'; characterized by: [a] the lender lends the exact amount [same quantity and same quality for fungibles like money/grain]; [b] the borrower returns only the exact amount borrowed — no more, no less; [c] no fee, no interest, no gift, no benefit of any kind to the lender; [d] the lender's motivation is charitable: getting spiritual reward by helping the borrower; Quranic encouragement of qard hassan: 2:245 'Who is it who will lend God a beautiful loan [qard hassan]?'; 57:11, 64:17, 73:20 — the qard hassan is repeatedly framed as lending to God [who repays in the next life]; the benefit prohibition in qard: the rule is strict: if the lender receives any benefit from the loan — a gift, a service, a preference in future dealings — this is riba; even a handshake that is warmer because of the loan is technically addressed; but: there is consensus that socially normal courtesies that existed before the loan relationship do not become riba because of the loan; debt collection: the creditor's rights: [1] the debtor must repay on the agreed date; [2] if the debt is due and the debtor is insolvent: 2:280 'If the debtor is in difficulty, give him time until it is easier for him — and if you give charity, it is better for you'; [3] the Hanafi position: a capable debtor's refusal to repay is dhulm [injustice]; the qadi may imprison a capable-but-refusing debtor; [4] debt forgiveness: strongly encouraged; 'a debt forgiven is twice the amount as sadaqa'; Islamic consumer credit: without interest-bearing loans, Islamic finance uses: [a] murabahah [cost-plus sale]: bank buys the good and sells to client at disclosed higher price on deferred payment — a sale, not a loan; [b] tawarruq [monetization]: client buys commodity from bank on credit, sells it for cash — controversial [OIC resolution 2009 declared organized tawarruq impermissible]; [c] ijarah [lease]: bank buys asset, leases to client; client pays rent; eventually acquires ownership) is the Islamic framework for permissible lending and debt management.