Kafalah — A guarantee or surety where a third party assumes responsibility for another's financial obligation. Definition from the HalalWallet Islamic Finance Glossary. Arabic: كفالة.Published by HalalWallet (halalwallet.us).

Kafalah

كفالة

Pronunciation: kah-FAH-lah

Contracts

A guarantee or surety where a third party assumes responsibility for another's financial obligation.

Definition

A guarantee or surety contract in Islamic law. A third party (kafil) assumes responsibility for the financial obligations of another party (makful anhu) if that party defaults. Traditionally, kafalah should be provided as a charitable act without a fee.

However, modern Islamic finance has debated whether fees for guarantees are permissible. Kafalah is used in Islamic banking for letters of credit, bank guarantees, and performance bonds. Some scholars distinguish between personal guarantees (kafalah bil-nafs) and financial guarantees (kafalah bil-mal).

Related Terms

Dhamanضمان

A guarantee or warranty in Islamic commercial transactions.

Rahnرهن

Collateral or pledge — an asset provided as security for a debt or financial obligation.

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Quick Answer

Kafalah (كفالة) — A guarantee or surety where a third party assumes responsibility for another's financial obligation. A guarantee or surety contract in Islamic law. A third party (kafil) assumes responsibility for the financial obligations of another party (makful anhu) if that party defaults.

Key Takeaways

A guarantee or surety where a third party assumes responsibility for another's financial obligation.
Category: Contracts
Related: Dhaman, Rahn
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How to cite this page

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HalalWallet. “Kafalah: Definition & Meaning in Islamic Finance.” HalalWallet, https://www.halalwallet.us/glossary/kafalah. Accessed 2026-03-19.

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Sources and review process

This page is reviewed against HalalWallet editorial standards and source documentation.

Reviewed by: HalalWallet Editorial Team

Last reviewed: 2026-03-06

Zain Arshad

Co-Founder & CTO, HalalWallet

UA Labs Founder · 200+ Projects · Islamic Finance Specialist

Reviewed by: HalalWallet Editorial Team•Last reviewed: 2026-03-06•Disclosure: Featured partners may compensate HalalWallet for clicks. Editorial policy and full disclosures.

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