Written By: Shabbir Sheikh
Born and bred in Leicester, UK, the author is a management consultant, property developer, and keen sportsman. He has a passion for local and national community charity work.
Even before the Covid-19 pandemic caused significant damage to the global economy, millions of people around the world were either struggling to meet their monthly mortgage payments or they earned insufficient wages to afford a costly home loan. Interest-bearing debts – including car loans, monthly credit card payments, and even personal favours – are now the norm. Put simply, modern economies are underpinned by consumer spending that is financed by borrowing. ‘Buy now, pay even more later.’ And, despite historically low interest rates, credit continues to remain expensive. The only winners are the banks themselves. Surely there must be a better way?
Thankfully, Muslims benefit from two important related economic principles of Islam: the prohibition of interest, or riba and the enjoining of interest-free loans, or Qardan Hasana, translated as ‘the good loan.’
As a management consultant and property developer in Leicester, UK, I have seen firsthand how punitive, burdensome and restrictive interest-bearing loans can be; and conversely how expansive and rewarding (spiritually and financially) is the altruistic system of Qardan Hasana, a unique terminology specific to Islam that is mentioned no less than six times in the Holy Quran.
Today’s communities of Dawoodi Bohras are most fortunate that the 52nd al-Dai al-Mutlaq Dr Syedna Mohammed Burhanuddin RA had the foresight to radically restructure business attitudes and ethics within the faith by encouraging his followers to adhere strictly to the principle of interest-free transactions. His Holiness established the Burhani Qardan Hasana Trust in Mumbai, along with ancillary trusts across the globe whose primary objective was to provide Islamic financial assistance to all members of the community. We are blessed that, under the guidance of his successor, Dr Syedna Mufaddal Saifuddin TUS, interest-free loans are now available to more and more Bohras worldwide.
Qardan Hasana has been instrumental in the social and economic prosperity of the Dawoodi Bohra community over the last 40 years. It has effectively combated poverty in our global community, enabled extraordinary commercial growth, and facilitated access to higher education and proper healthcare for many. Unlike other financial institutions, which require high amounts of collateral and security, Qardan Hasana trusts strive to offer ‘the good loan’ in exchange for relatively small levels of security depending on the applicant’s needs and income-generating ability.
I was fortunate to experience the value of Qardan Hasana firsthand in 2004 when purchasing my first home, a significant decision that I knew would impact my family for many years. I clearly remember worrying about how I would meet the repayments, but expressing relief that I did not have to sign up for 30-year mortgages like some of my non-Bohras friends and business colleagues.
By contrast, I recall once speaking about mortgage payments to a valued customer, over a cup of tea. I explained to him the philosophy of Qardan Hasana and my Islamic beliefs against taking loans that charge interest. When I asked him why he thought it financially prudent to ultimately pay triple the original price of his home and buy-to-let houses by having a mortgage, his answer simply was that everybody does it! He made his argument and we amicably agreed to disagree. A few days later he called me to say our conversation had really struck a chord, and that from now on he would change his investment strategy and focus on reducing his mortgages.
Having been a recipient of Qardan Hasana and a volunteer on the team that manages the Qardan Hasana department, I have witnessed the difference it makes in people’s lives. Unfortunately, the majority of non-Bohras who are unable to take advantage of Qardan Hasana are saddled by monthly loan repayments that are considered normal but are in fact unnecessarily burdensome.
An important aspect of Qardan Hasana is that it is not merely a material transaction but one that fosters a spiritual uplift as well. The persons giving and receiving Qardan Hasana do so in the name of Allah TA, and therefore consider it an act of piety.
One also learns to budget one’s expenses, curb overspending on whims, start saving, and lead a financially secure lifestyle.
As a direct result of Qardan Hasana, the global Bohra community has grown not only in enterprise but in its philanthropic endeavours. I take particular pride that, while the primary contribution to the Qardan Hasana schemes is provided by the extraordinary generosity of His Holiness, many contributions come from local community members.
Qardan Hasana has helped foster a renewed sense of business and trade within the community but more importantly, it has demonstrated that spiritual acts yield both spiritual and material benefit – and that helping others is the best way to help oneself attain peace of mind.