Qardhul Hasan

(redirected from Qard al-Hasan)

Qardhul Hasan

In Islamic finance, an interest-free loan. In qardhul hasam, the borrower only repays the principal amount. Because the Quran forbids paying or receiving interest, qardhul hasam is the only permissible loan in Islamic finance. However, this does not preclude a number of other investment vehicles that imitate the payment of interest. See also: Sukuk, Murabaha, Mudharaba.
References in periodicals archive ?
Earlier this month, DSI secured an interest-free qard al-hasan loan of up to $27.
An official source in Sabaa Group for Pharmaceutical and Chemical Industries said that the company has spent about EGP 15m--representing 50%--of Qard Al-Hasan (benevolent loan) provided by senior shareholders in the company throughout the past period with the aim of injecting them into financing production operations, such as purchasing pharmaceutical products from other companies.
He also proposed the establishment of dedicated Qard al-Hasan funds to address financing needs of specific target group and as a means to support social infrastructure financing.
My target group, the small entrepreneurs, fell between the categories: too small for mudarabah and murabahah, too big, and too many, for qard al-hasan.
Modes of financing allowed in the Law include qard al-hasan, mudharabah, civil partnership, legal partnership, hire--purchase, instalment transactions, muzara'ah, mosaqaat, direct investment, forward deals, joa'lah, and debt-purchase [Bank Markazi Jomhori: Islami Iran (1983)].
In mid-1984 the central bank announced twelve "Islamic" modes of finance comprising mark-up, mark-down, buy-back, leasing, hire-purchase, development charge, musharikah, equity, participation term certificates, rent-sharing, qard al-hasan, and service charge.
All banks are obligated to grant a part of their resources in qard al-hasan.
Qard al-hasan is granted to production and service cooperatives, to small farmers and craftsmen, and for personal needs such as matrimonial costs, procurement of dowry, medical costs, house repairs, and educational aid [Shirazi (1988)].
Drake & Scull International (DSI) has secured an interest-free qard al-hasan loan of up to $27.
DSI said the qard al-hasan loan would help to bridge its working capital requirements and improve its liquidity as it targets new contract awards.