---
title: "What is Kafalah? | IslamicOpenFinance™"
description: "A guarantee: a guarantor joins the guaranteed party in assuming a specified liability."
url: https://islamicopenfinance.com/glossary/kafalah/
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

# Kafalah

A guarantee: a guarantor joins the guaranteed party in assuming a specified liability.

Kafalah is a contract of guarantee. The IFSB defines it as a contract in which the guarantor conjoins the guaranteed party in assuming the latter's specified liability. It underpins Islamic bank guarantees and letters of guarantee, and because classical scholarship treats a guarantee as a gratuitous contract, debate centres on whether and how a guarantor may charge for it.

## Sources

- [IFSB-21 Core Principles for Islamic Finance Regulation (Islamic Capital Market Segment), 2018: Definitions, Kafalah](https://www.ifsb.org/wp-content/uploads/2023/10/IFSB-21-December-2018_En.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

[**Hawalah** Transfer of a debt: the obligation to pay moves from the original debtor to another party who accepts it.](https://islamicopenfinance.com/glossary/hawalah/) [**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/) [**Wakalah** Agency: one party appoints another to act on its behalf, with or without a fee.](https://islamicopenfinance.com/glossary/wakalah/)

**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. [Hawalah](https://islamicopenfinance.com/glossary/hawalah/)
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/)