Fiqh Muamalat II MGA3043 - Al-Kafalah (الكفالة)

Front

What is the literal meaning of Al-Kafalah (الكفالة)?

Back

Guarantee, security, bail, warranty, surety.

Front

What is the technical definition of Al-Kafalah (الكفالة)?

Back

A conjoining of the guarantor's liability to the liability of the guaranteed.

Front

What is the legal basis of Al-Kafalah (الكفالة) according to the Quran?

Back

One proof from the Qur'an is in the verse: "For the one who produces it [the King’s beaker], the reward is a camel load; I will be his guarantor" [12:72]. Ibn 'Abbas explained that the word Za‘im here means guarantor (kafil)

Front

What is the nature of Al-Kafalah in Islamic finance?

Back

Al-Kafalah is considered one of the security contracts and is an act of tabarru’ where the guarantor offers to guarantee another’s commitment.

Front

What are the pillars of Al-Kafalah (الكفالة)?

Back

1) Contracting Parties (Kafil, Makful lahu, Makful ‘anhu)

2) Subject Matter (Makful Bihi)

3) Format (Al-Qabul, Al-Ijab)

Front

What are the two main types of Al-Kafalah?

Back

1. Kafalah bi al-nafs (كفالة بالنفس): Guarantee to bring the guaranteed person to the beneficiary. 2. Kafalah bi al-mal (كفالة بالمال): Guarantee to settle one’s debt for others if the debtor does not settle his debts.

Front

What is Daman al-dark/al-’ahdah (ضمان الدرك/العهدة)?

Back

A guarantee on the price for the seller and on the delivery of the subject matter to the purchaser.

Front

What is Daman al-suq (ضمان السوق)?

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A guarantee on the debts incurred by traders and on the properties taken by traders, which is impermissible according to al-Shafi’iyyah.

Front

What is the ruling on charging fees for Al-Kafalah?

Back

Al-Kafalah is a charitable contract, and charging fees is generally not permissible unless it is for necessities or public conveniences.

Front

How is Al-Kafalah applied in Islamic banking in Malaysia?

Back

It is used in products such as personal guarantees, bank guarantees, Islamic credit cards, Islamic deposit insurance schemes, and Islamic standby letters of credit.