Qard

Qard is an Arabic term (قرض) that broadly means a loan or the act of lending money. In everyday usage it denotes any agreement where one party provides funds to another with the expectation of repayment. In Islamic finance, qard appears most often in the form of qard hasan, a benevolent loan intended to help the borrower without earning profit for the lender.

Qard hasan is distinguished by the absence of interest. The borrower is obligated to repay only the principal amount borrowed, though lenders may recoup reasonable administrative costs in some arrangements. Lenders can be individuals, charitable organizations, or financial institutions operating under Shariah principles. While repayment terms can be flexible, the core principle is that no profit or riba (usury) is charged.

Religions and regulatory frameworks emphasize that qard hasan complies with Islamic law by avoiding interest and ensuring terms are clear and fair. Some jurisdictions and institutions also specify guidelines for transparency, repayment schedules, and eligibility to prevent exploitation.

In practice, qard hasan is used in microfinance, charitable relief, and community development programs. Funds are often disbursed to people who lack access to conventional credit, with the expectation of repayment that can be recycled to assist others in need. The concept is valued for social welfare and practical support, rather than financial gain, and remains a common feature of Islamic philanthropic and financial activity.