Kafalah
كفالة
Pronunciation: kah-FAH-lah
A guarantee or surety where a third party assumes responsibility for another's financial obligation.
Definition
A guarantee or surety contract in Islamic law. A third party (kafil) assumes responsibility for the financial obligations of another party (makful anhu) if that party defaults. Traditionally, kafalah should be provided as a charitable act without a fee.
However, modern Islamic finance has debated whether fees for guarantees are permissible. Kafalah is used in Islamic banking for letters of credit, bank guarantees, and performance bonds. Some scholars distinguish between personal guarantees (kafalah bil-nafs) and financial guarantees (kafalah bil-mal).
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Kafalah (كفالة) — A guarantee or surety where a third party assumes responsibility for another's financial obligation. A guarantee or surety contract in Islamic law. A third party (kafil) assumes responsibility for the financial obligations of another party (makful anhu) if that party defaults.
- A guarantee or surety where a third party assumes responsibility for another's financial obligation.
- Category: Contracts
- Related: Dhaman, Rahn
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Last reviewed: 2026-07-01
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