Back to search

What is the meaning of loan (qard), debt (dayn), deposit (wadi'ah), and investment (istithmar) in Islam, and what is the meaning of loan (qard) in the Holy Quran, and is it permissible to borrow for non-essential matters, such as building a factory?

1 min readAlso available in العربية

The answer to the meaning of (loan, deposit, debt, investment) depends on the linguistic meaning and what is customary in banks. The loan has been defined previously. As for a deposit, it is handing over money to someone who keeps it without compensation. Debt is taking money to return it to its owner after a period agreed upon by the two parties. Investment is seeking to increase and grow money.

As for borrowing for the purpose of building a factory or developing money, if it is permissible and free of usury, then there is no harm in it. Rather, it is a lawful earning that a Muslim is encouraged to pursue, according to the words of the Prophet, peace and blessings be upon him: "A man's work with his own hands and every righteous sale." It is obligatory for the one who takes a loan to intend to repay it, according to the words of the Prophet, peace and blessings be upon him: "Whoever takes people's money with the intention of repaying it, Allah will repay on his behalf, and whoever takes it with the intention of destroying it, Allah will destroy him."

As for the meaning of "qard" (loan) in the Holy Quran, the most preponderant opinion is that it includes every expenditure in the way of Allah Almighty with sincerity, as mentioned by Ibn Kathir when interpreting the verse: "Who is it that will lend Allah a goodly loan?" (Al-Baqarah: 245). So, whoever spends in the way of Allah with a sincere intention and a firm resolve falls under the generality of this verse.

Summarized from the full answer at Ftawy · reviewed Sep 2, 2026

Read the full answer on Ftawy