Qard Hasan
Qard hasan is a benevolent, interest-free loan made to help the borrower rather than to earn a return. The principal remains repayable, but the lender seeks no benefit and is expected to be lenient if the borrower struggles.
Also called: qard al-hasan · qardh hasan · benevolent loan · goodly loan
The phrase "a goodly loan" appears in the Qur'an, and qard hasan is the form of qard most associated with social purpose. It is used by Islamic microfinance institutions, community funds, mosques, zakat and waqf bodies, and some Islamic banks for students, small traders and households in hardship.
Because the lender earns nothing, qard hasan is usually funded from charitable or social capital — zakat, sadaqah or the income of a waqf — rather than from depositors who expect a return. Costs can be covered by a fixed charge reflecting actual administration, not by a margin.
In practice
Qard hasan is not a gift. The borrower owes the principal; it becomes charity only if the lender later chooses to forgive it.
Example
A community fund lends a widow US$1,500 to restock her market stall. She repays US$100 a month for 15 months. When illness stops her trading for two months, the fund pauses repayments without any charge.
Commonly confused with
| Term | How it differs |
|---|---|
| Sadaqah | Sadaqah is a gift and is not repaid. Qard hasan is a loan and is repaid, unless the lender chooses to forgive it. |
| Gemach | A gemach is a Jewish free-loan fund. It operates on the same principle — interest-free lending as a communal good — in a different legal tradition. |
See also
- QardQard is a loan of fungible property — usually money — that the borrower must repay with its equivalent, with no stipulated benefit to the lender. Any benefit the lender requires as a condition of lending raises a riba problem.
- SadaqahSadaqah is voluntary charity: giving of any amount, at any time, to anyone in need, beyond the fixed obligation of zakat and without expecting repayment.
- ZakatZakat is the obligatory annual alms on qualifying wealth above a minimum threshold, payable to specified categories of recipients. It is one of the pillars of Islam, and in some countries it is collected by the state.
- WaqfA waqf is an Islamic endowment: an asset permanently dedicated so that its income or benefit serves a charitable, religious or public purpose, while the asset itself is preserved rather than spent.
- GemachA gemach is a Jewish mutual-aid institution.