Is imposing a fine on a customer who is late in paying installments for electrical appliances — whether the delay is excusable or inexcusable, and with the customer’s prior agreement to pay the fine — considered Haram? What is the correct action to take to avoid losses resulting from customers’ delayed payments, knowing that the absence of a fine leads to customer delays and losses for the company?

The fine for delaying debt repayment is unlawful (haram (definition)) in Islamic law, whether the delay is due to an excuse or not. The ruling is not altered by the client's agreement to pay it, as this is explicit usury (riba). If the client is a defaulter, his case should be referred to the courts, and sufficient guarantees can be taken from him before contracting. If he is in hardship, it is obligatory to grant him respite until he can repay, or to forgive the debt as charity, based on the Almighty's saying: "And if there is one in hardship, then [give him] respite until [a time of] ease. But if you give [from your right as] charity, it is better for you, if you only knew." The penalty clause for compensating late payment is impermissible because it is usury. The creditor may take a collateral from the debtor to guarantee his right in case of delayed payment.