The proverb in the title has an unfortunate reality. Many Muslims are finding themselves increasingly in debt. Creditors have to persistently remind the debtor of the loan they have ‘forgotten’ to pay. It is extremely rare, that you find the debtor reminding the creditor of his own debt. Often the relationship between the creditor and the debtor turns sour because Islamic principles are not the basis for their financial dealings and disputes.
This article discusses the Shariah rules pertaining to loans and debts. Indeed, Islam is very strict upon the Creditor’s motive and the Debtor repaying back what he has borrowed.
Characteristics of the Lender
The Prophet (saw) said: "Every loan is a sadaqah".
Islam encourages those who have enough wealth to give loans to those who request it. However it is important that the creditor or the lender should not seek any material benefit from giving a loan. He must seek the ethical value when advancing money as a loan and not expect anything material in return. Hence the lender is enhancing his personal quality of generosity and trying to remove any traits of stinginess from his soul. This is the definition of a loan in Islam. The motive is to help a person in need and seek only the reward and pleasure of Allah (swt).
This is often overlooked and sometimes the creditor may expect a material favour in return of his loan. Such a mentality by the lender is extremely dangerous, as the intent of a loan is not to seek the material value. This way of thinking produces a despicable being that thrives on personal greed and interests. This mentality of seeking a material benefit in every single action in life is a product of the Capitalist ideology that we unfortunately live under and sadly many Muslims are behaving in a similar manner.
The source of our inclinations must come from the pure Islamic Aqeedah and not the Secular Creed of Capitalism. Only by referencing the divine sources for our mentality and inclinations can we say that we have an Islamic personality.
Take the example of Abu Hanifah he indeed exhibited an Islamic personality. Once Imaam Abu Hanifah attended a Janaazah on an extremely hot day. The only shade in the vicinity was the shadow of a wall belonging to his debtor. However, Imaam Abu Hanifah remained standing in the blazing hot sun. When people insisted that he stand in the shade, he said: "The owner of the house is my debtor. It is not permissible for me to derive any gain from him because the benefit produced by every qardh (loan) is riba (interest)."
Characteristics of the Debtor
The Prophet(saw) said: “All the sins of a Shahid (martyr) are forgiven except debt.”
The above hadith clearly shows the severity of not paying back debts. The Muslim who dies before paying back his debt will be a sinner earning the displeasure of Allah(swt) in the life hereafter. The debtor or borrower must honour his promise of paying back what he has borrowed.
Borrowers must appreciate the help they receive and try as best as they can to ensure repayment on time. Unfortunately, it is often the case that friends or relatives abuse the kindness given to them. In financial dealings, people often do not honour their promises. Many of us can relate stories that we, or some close relatives of ours experienced, and all confirm that many people are ready to request loans and credits, but they shy away when it is time for them to settle such debts.
When trying to retrieve the loan back, some debtors act in a manner contrary to the etiquette of Islam. At times, the borrower is ready to insult the creditor who asks him for repayment and some will even go so far in persistently lying to the creditor to try and extend the repayment date or even not pay the debt at all.
Narrated by Aisha,
“Allah’s Messenger (saw) used to invoke Allah in the prayer saying, “ O Allah, I seek refuge with you from all sins, and from being in debt.” Someone said, O Allah’s Messenger! (I see you) very often you seek refuge with Allah from being in debt. He (saw) replied, “ If a person is in debt, he tells lies when he speaks, and breaks his promises when he promises.”
What can be upsetting to the creditor is when the borrower has agreed to pay on a particular date but does not pay the amount due on time nor even contact the creditor. Weeks and months or even years can pass by without the borrower picking up the phone and explaining why he has not paid back the money he had borrowed. Long periods of non-communication by the debtor will only build suspicion and ill feeling towards the borrower.
Such a mentality by the debtor is unacceptable and he must take the necessary steps to reassure the creditor that he is doing all he can to pay back what he has borrowed. He does not know when death will reach him and the debt will still be hanging on his neck even in the grave.
It has been narrated:
A dead person was brought to the Prophet so that he might lead the funeral prayer for him. He asked, "Is he in debt?" When the people replied in the negative, he led the funeral prayer.
Another dead person was brought and he asked, "Is he in debt?" They said, "Yes." He (saw) refused to lead the prayer and said, "Lead the prayer of your friend." Abu Qatada said, "O Allah's Apostle! I undertake to pay his debt." Allah's Apostle then led his funeral prayer.”
Unfortunately this has led many Muslims to refrain from the good deed of extending loans even to their immediate relatives because of their bitter experiences. When such a common mentality is widespread it clearly indicates a problem in society.
The business environment can be extremely hostile and even abusive when the creditor is trying to retrieve his money from the debtor. This often will lead to Muslims falling out with each other and perhaps never talking to one another again. Often both parties will slander one another to the point that the creditor will eventually take legal proceedings against the debtor.
This mentality of lying and giving excuse after excuse by the Muslim debtor is a result of the office environment that breeds the benefit mentality. Such atmospheres are driven to obtain the maximum amount of profit and benefit in any way they can, having no regard for honesty and fair-trading.
Take for example a Muslim who owes money to somebody but delays the payment because he ‘perceives‘ that the lender is rich and that he is not in need of it urgently.
The creditors financial status, i.e. whether he is rich or poor, should not be questioned nor should it be the reason for repaying a debt early or late. The moment the debtor has the capability of paying, he is obliged to do so from Shara’a. He would be sinful for holding onto something that doesn’t belong to him.
Narrated Abu Huraira: Allah’s Messenger said: “ Procrastination (delay) in repaying debts by a wealthy person is injustice.”
This illustrates how society is moulding his inclinations and not the divine texts.
Thus if a lender anticipates that giving a loan to a Muslim will sow the seeds of discord then he would be prudent to refrain from giving a loan to such a person. Only until the borrower aligns his disposition in accordance with the divine text would it be safe to enter a loan agreement.
Divine Rules regarding loan (Al Qardh) Transactions
It is extremely important that the loan agreement fulfils the basic principles of contracts in Islam. These principles are as follows:
§ Both parties should be legally from Shar’a capable to enter into the qardh contract.
Islam obliges (fard) that the parties must fulfil the following requirements. Those entering the agreement must be:
Baligh ( reached the age of puberty )
'aqil ( sane )
rashid ( of sound judgement )
Allah (swt) says,
"Make trial of orphans until they reach the age of marriage; if then you find sound judgement in them, release their property to them." [Al-Nisa : 6].
This ayat states that the age of marriage and sound judgement is the age of maturity, and thereby a mature person is capable to enter into any transaction validly.
The Prophet (saw) said,
"The pen is raised for three groups (of people) that is, they will not be responsible for their actions: the insane until they become sane, those who are sleeping until they are awaken, and the youth until they reach puberty."
The above hadith makes it clear that a person, who has not attained the age of puberty, may not be a responsible party for al-qardh agreement.
§ Ijab (offer) and qabul (acceptance) of the qardh must be clearly made before entering into the loan contract:
Both parties must be extremely clear on their agreement i.e. what is being offered and what is being accepted. The ijab and qabul should be clearly expressed and indicated in the contract, otherwise the loan contract might create a dispute in the future.
§ The date of payment should be specified
It is recommended (mandoub) the date of payment should be mentioned in the loan agreement. If no date is specified, the transaction may lead to ambiguity and dispute in the future between the lender and the borrower.
"Whoever enters into a contract of salam should specify the date of delivery and the amount of subject matter."
§ The loan contract should be written down.
It is mandoub that both parties agree to write down the loan agreement. This will ensure that future disputes are avoided.
"O you who believe! When you deal with each other in transactions involving future obligations for a fixed period of time reduce them in writing." [Al-Baqarah : 282]
Unfortunately, some of us think that if they are requested to write down the loan agreement, then such a request means that the creditors do not trust them, when it is Allah(swt) that has made this a recommendation.
§ Getting two witnesses.
It is mandoub that both parties agree upon witnesses being present. This will ensure that future disputes are avoided.
Allah(swt) tells us that two male witnesses should be present, if two men are not available, then one man and two women will have the same effect.
"And get two witnesses out of your own men and if there are not two men, then a man and two women." [Al-Baqarah : 282]
Being patient with the struggling Debtor
The Prophet (saw) said, "Whoever relieves a believer from a difficulty in this world, Allah will relieve him from his difficulty and Allah will facilitate him in this world and the world hereafter."
Taking all the above considerations into account will not guarantee your loan being returned on time. A debtor may be struggling to repay his debt despite his promise to pay it back on a particular date. He is doing all he can within his capability to pay it back. He keeps in regular contact with the lender to update him on his efforts to pay back what he borrowed. He is conscious of the severity of not paying the loan back and he makes a plea to Allah(swt) to aid him in his difficult times. Such a person who exhibits ikhlas khalis (pure sincerity) deserves help and the lender must be patient with him and understanding of his difficult circumstances.
The Prophet (saw) said, "Once a man died and was asked, 'What did you use to say (or do) (in your life time)?' He replied, 'I was a businessman and used to give time to the rich to repay his debt and (used to) deduct part of the debt of the poor.' So he was forgiven (his sins.)"
The Debtor showing his appreciation towards the Creditor
The Creditor is forbidden to ask for anything extra from his loan, as this is clearly Riba (interest). However it is perfectly acceptable for the Debtor to give something more than he received, as a token of appreciation for the creditors good deed.
The Prophet(saw) said,
A man demanded his debts from Allah’s Messenger in such a rude manner that the Companions of the Prophet intended to harm him, but The Prophet (saw) said: “ Leave him, no doubt, for he (the creditor) has the right to demand it (harshly). Buy a camel and give it to him.” They said, “ The camel that is available is older than the camel he demands. The Prophet (saw) said “ Buy it and give it to him, for the best among you are those who repay their debts handsomely.”
Ethical trading is absent from the Capitalist mentality. This corrupt way of thinking is firmly embedded in the Aqeedah of Capitalism. Morality does not enter the financial world because there is nothing to gain materially from ethical trading in Capitalist societies. Hence the relationship between the Muslim Creditor and Muslim Debtor must at all times be based on the pure Islamic Aqeedah.
The Creditor must ensure his motive is free from any material gain, he must be patient and compassionate with the sincere struggling debtor if he wishes to earn a place in Jannah.
The Debtor must be honest, sincere and appreciative for the kindness shown to him. His attempt to repay his loan on time must be serious and genuine if he too wishes to enter Jannah.
Muslims must abandon this benefit mentality and adopt the Islamic mentality in their financial dealings. This is paramount when dealing with your Muslim brother or a Non-Muslim. Indeed the Muslim must adopt the purity of Islamic trading, as this will demonstrate to the non-Muslims the stark difference in our personality to that of the Capitalist personality.
By S. al-Baruchi