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 ?
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.
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)].