Essential Elements of Ariyyah

Al-Mui`r (lender)
Al- Musta`ir (borrower)
Sighah (Contract)
Musta`ar (object of Ariyah contract)6
1) Contract of Ariyah/I`arah
(1) and (2) Lender and Borrower.
There are three necessary conditions of Lender and borrower.
i. capable of taking responsibility. They must :
be of sound mind, i.e. not mad, not mentally retarded,
nor children (aqil)
have reached the age of puberty (baligh), and7
ii. not prohibited from dealing with their property, i. e:
not declared bankrupts, or
not declared prodigals
iii. no coercion is exerted on either of them
Note:
The essential elements and necessary conditions elaborated above are for lender
and borrower who are individuals. For institutions, the applicable necessary
conditions are the same following the legal practices of ones country. In addition,
the individuals representing the institutions must possess all the listed necessary
conditions
3. Conditions of Object of Ariyah
The property should be known and usable the
substance of which is not consumed by it use.
No condition is allowed which requires the return of any
object other than the borrowed object.
The borrower may lend the borrowed object to a 3rd
party, but he must not hire it out or give it as a pledge
or security.
The borrower is entitled to make use of the loan without
consideration or payment

http://www.islam.gov.my/muamalat/sites/default/files/kertas_ilmiah/2011/03/tabarru_contract-
zakirullah_ibfim__portal.pdf

qard
Finance
interest-free loanin Islamic financing, a loan, which under Islamic law is always free of profit. A qard may
also be a bank deposit, which is considered a loan to a bank for its use but which must be returned to the
depositor upon request

Introduction

The word qard is derived from Arabic qirad which means to cut. It is
called qard as it cuts certain part of the lenders property by giving loan to the
borrower. Hasan is also an Arabic word which originates from ihsan, which
means kindness. Hasan is an act which benefits persons other than those
from whom the act proceeds without any obligation. Perhaps the word hasan,
understood in the context of ihsan, is meant to imply that the transaction is
possible only when a person is fully aware that he or she is making a loan to
someone in need without expecting anything in return from him, but only in
order to please Allah s.w.t.
Therefore, the term al-qard ul-hasan means beneficial loan or benevolent
loan or gratuitous loan. Chapra has defined al-qard ul-hasan as a loan which is
returned at the end of the agreed period without any interest or share in the
profit or loss of the business.
The difference between al-qard ul-hasan and sadaqah(charity), is that al-qard
ul-hasan has to be repaid, although the borrower specifies the time of
repayment, while sadaqahis pure charity. It is reported from the Prophet s.a.w.
that the reward by Allah s.w.t. for sadaqah is ten times and that of al-qard ul-
hasan is eighteen times, thus underlining the importance of al-qard ul-hasan.

Objectives of Al-Qard Ul-Hasan
Islam emphasizes on brotherhood among the Muslims and since al-qard ul-
hasan being a gratuitous loan can help the fellow Muslims who need money,
we can deduce the objectives of al-qard ul-hasan as the following :
a) To help the needy fellow people
b) To establish better relationship among the poor and the rich people
c) To mobilize wealth among people in the society
d) To perform a good deed that is encouraged and appreciated by Allah s.w.t.
and Prophet Muhammad s.a.w.
e) To strengthen the national economy
f) To facilitate the poor to create new job market and business venture by
using their merits, skills and expertise
g) To establish a caring society
h) To eradicate unemployment problem from the society
i) To remove social and economical discrimination in the society

http://myviewpoint2u.blogspot.com/2009/06/concept-of-al-qard-ul-hasan.html

http://www.orfd.nl/publication/malaysian-i-bankers-perception-on-qard-hasan/wppa_open/