Qard-hasan: microfinance and social entrepreneurship

Magda Ismail Abdel Mohsin () and Aishath Muneeza ()

Chapter 5 in Inclusive Finance, 2025, pp 71-88 from Edward Elgar Publishing

Abstract: Qard-hasan, an interest-free loan system grounded in Islamic principles, serves as a vital instrument for poverty alleviation, economic empowerment, and social entrepreneurship. As a Shariah-compliant financial tool, qard-hasan promotes financial inclusion by enabling individuals experiencing poverty to access necessary funds without the burden of interest, fostering dignity and self-reliance. This chapter explores the theological foundations, principles, and objectives of qard-hasan while underscoring its significance in the Islamic microfinance framework. It highlights the role of qard-hasan in advancing socio-economic development through wealth redistribution, charitable deeds, and the elimination of financial discrimination. Furthermore, the chapter examines the integration of qard-hasan within microfinance and its alignment with Islamic values, emphasising its role in supporting social entrepreneurship and ethical business practices. Challenges and modern applications of qard-hasan are analysed to illustrate its adaptability and potential in contemporary settings. By bridging gaps between social justice, economic equity, and ethical financial practices, qard-hasan emerges as a transformative tool for fostering sustainable community development and empowering marginalised groups.

Keywords: Qard-hasan; Interest-Free Loan; Islamic Microfinance; Social Entrepreneurship; Poverty Alleviation; Financial Inclusion; Ethical Business Practices; Islamic Economic Development (search for similar items in EconPapers)
Date: 2025
ISBN: 9781035348763
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