Shari’ah Ruling on Giving Zakat to a Debtor and Its Principles
Source: Fatawa ‘Ulama-e-Hadith, Kitab al-Salah, Volume 1
❖ Question
A man owes me several lakhs of rupees. I wish to forgive a portion of the amount as Zakat, but I do not want to inform him, fearing that he might lose the incentive to repay the loan. I intend to hand over the forgiven amount to him at the end. Is my action correct?
❖ Answer
It is permissible to give Zakat to a debtor who is unable to repay his debt. If the debtor is financially distressed and qualifies to receive Zakat, then it is permissible — and in fact encouraged — to forgive the entire debt or a portion of it as charity. This is a manifestation of the beauty of Islam, and Zakat itself is an obligatory form of charity.
❖ Loan and Interest
In the interest-based system, the moneylender insists on recovering his wealth along with interest under all circumstances, even if the debtor has to sacrifice his own well-being to pay it back.
Allah has condemned interest, describing it as a war against Allah and His Messenger.
Only the recovery of the original principal amount has been permitted, and if the debtor is unable to return the money, Islam encourages forgiveness, which is achievable through either obligatory or voluntary charity.
❖ Verses from the Qur’an
Allah ﷻ states:
﴿يـٰأَيُّهَا الَّذينَ ءامَنُوا اتَّقُوا اللَّهَ وَذَروا ما بَقِىَ مِنَ الرِّبوٰا۟ إِن كُنتُم مُؤمِنينَ ٢٧٨ فَإِن لَم تَفعَلوا فَأذَنوا بِحَربٍ مِنَ اللَّهِ وَرَسولِهِ ۖ وَإِن تُبتُم فَلَكُم رُءوسُ أَموٰلِكُم لا تَظلِمونَ وَلا تُظلَمونَ ٢٧٩ وَإِن كانَ ذو عُسرَةٍ فَنَظِرَةٌ إِلىٰ مَيسَرَةٍ ۚ وَأَن تَصَدَّقوا خَيرٌ لَكُم ۖ إِن كُنتُم تَعلَمونَ ٢٨٠﴾
Surah Al-Baqarah
Translation (for understanding):
“O you who believe! Fear Allah and give up what remains of interest, if you are truly believers (278).
But if you do not do so, then be warned of war from Allah and His Messenger. However, if you repent, then you may keep your principal—neither will you wrong nor be wronged (279).
And if the debtor is in difficulty, grant him time until ease. And that you remit it by way of charity is better for you, if only you knew (280).”
❖ Intention at the Time of Giving a Loan
When giving a loan, the intention is indeed of lending. The wealth remains that of the lender and is to be returned after a specific time.
In the case of the debtor’s financial hardship, the lender may choose to forgive part or all of the loan with the intention of obligatory or voluntary charity, which, in light of the verse above, is highly meritorious.
❖ Intention of Charity
It must also be noted that once a gift is given to someone, or a voluntary charity is given to a poor person, the ownership transfers to the recipient. Therefore, after a period of time, one cannot change the intention and declare it as Zakat retroactively.
