---
title: "What is Hawalah? | IslamicOpenFinance™"
description: "Transfer of a debt: the obligation to pay moves from the original debtor to another party who accepts it."
url: https://islamicopenfinance.com/glossary/hawalah/
lang: en-GB
source: "IslamicOpenFinance"
---

[Glossary](https://islamicopenfinance.com/glossary/) / [Lease, agency and service contracts](https://islamicopenfinance.com/glossary/#lease)

Lease, agency and service contracts

# Hawalah

Transfer of a debt: the obligation to pay moves from the original debtor to another party who accepts it.

Hawalah is the transfer of a debt from the liability of the original debtor to another party, who becomes responsible for paying it. Bank Negara Malaysia's murabahah policy document defines it, as hiwalah, in these terms. It is the classical basis for debt transfers and for some payment and settlement arrangements, and it generally involves the agreement of the parties concerned.

## Sources

- [Bank Negara Malaysia, Murabahah policy document, 2013: Glossary, Hiwalah](https://www.bnm.gov.my/documents/20124/938039/20131223_S_O_0001.pdf)

This entry explains a term; it is not a Shariah ruling. Approving a product is for each institution's own Shariah board and regulator.

## Related terms

[**Kafalah** A guarantee: a guarantor joins the guaranteed party in assuming a specified liability.](https://islamicopenfinance.com/glossary/kafalah/) [**Qard** A loan of money to be repaid in an equivalent amount; any benefit stipulated for the lender is riba.](https://islamicopenfinance.com/glossary/qard/) [**Rahn** A pledge: an asset held as collateral for a debt, which can be sold to repay it if the debtor defaults.](https://islamicopenfinance.com/glossary/rahn/)

**Lease, agency and service contracts**

1. [Ijarah](https://islamicopenfinance.com/glossary/ijarah/)
2. [Ijarah muntahia bittamleek](https://islamicopenfinance.com/glossary/ijarah-muntahia-bittamleek/)
3. [Wakalah](https://islamicopenfinance.com/glossary/wakalah/)
4. [Kafalah](https://islamicopenfinance.com/glossary/kafalah/)
5. [Ju'alah](https://islamicopenfinance.com/glossary/jualah/)
6. [Rahn](https://islamicopenfinance.com/glossary/rahn/)
7. [Ijarah mawsufah fi al-dhimmah (forward lease)](https://islamicopenfinance.com/glossary/ijarah-mawsufah-fi-dhimmah/)
8. [Ijarah of services](https://islamicopenfinance.com/glossary/ijarah-of-services/)

[All 221 terms](https://islamicopenfinance.com/glossary/)