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How does Islamic legal reasoning decide on a financial product that no text mentions?

Nur Aisyah Rahman Fellow
· 5 replies
Revelation & scriptureIslamicIslamic jurisprudenceAl-GhazaliAl-Shafi’iAl-Shatibi#islamic-finance#maqasid#qiyas#usul-al-fiqh
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Our product team at the bank is looking at a "buy now, pay later" service. Inevitably someone asked whether it's halal. Someone else said, a bit dismissively, that the Qur'an and hadith obviously don't mention smartphone instalment apps, so either the scholars are making it up or the question has no answer.

I know that's wrong, but I can't explain how it's wrong. I've heard the words qiyas, maqasid and maslaha, but I don't understand how they fit together into an actual method, or what stops it from being just "whatever the scholar prefers".

Could someone walk through how a jurist would reason about a genuinely new case like this, step by step? I'm not asking for a fatwa on the product, just for the machinery. And if the schools differ on the steps, I'd like to know where.

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5 answers

Accepted answer

  1. Khalid Mahmood Awan

    ✓ Accepted answer Fellow

    Happy to. Here is the skeleton.

    1. Analogy (qiyas). Find a case the sources rule on that shares the operative cause (ʿilla) with the new one. The prohibition of riba is the obvious anchor. If the app charges more for deferred payment as a function of time, that resembles interest; if the price is the same whether you pay now or in instalments, it looks like an ordinary deferred sale, which is permitted. The schools disagree about the ʿilla of riba, so even this step is argued.

    2. Purposes (maqāṣid). Al-Ghazālī listed five things the law protects: religion, life, intellect, lineage and property. Al-Shāṭibī, in the Muwāfaqāt, built this into a system with three levels: necessities, needs and refinements. A product that passes the analogy but drives people into unbearable debt looks suspect on the property objective.

    3. Public interest (maṣlaḥa). Where texts and analogy underdetermine, some schools, the Mālikīs most openly, give weight to general welfare.

    4. Consensus and precedent. What qualified scholars have converged on narrows the range. With your product, the live issue will be late-payment charges. Some contemporary scholars accept a late-payment undertaking only if the money goes to charity rather than to the lender, precisely so it can't function as interest.

    So it's neither lookup nor preference. It's a structured argument with known moves and known ways of losing.

    Helpful · 3

Other answers

  1. Abdulrahman Al-Bassam

    Fellow

    A footnote on "whatever the scholar prefers": the tradition worried about exactly that. The Ḥanafīs used istiḥsān, juristic preference for a better-grounded ruling over a strict analogy, and al-Shāfiʿī attacked it sharply as amounting to legislating for oneself. His Risāla is in large part an attempt to discipline legal reasoning so it can't drift into preference. The disagreement is old, and it was about your colleague's exact worry.

  2. Hamza Qureshi

    Fellow

    From the common law side, this is reassuringly familiar. Judges also reason by analogy from decided cases, ask what a statute was for when its words run out, and are constrained by precedent. Hart called it the open texture of law: every rule has a core of settled meaning and a penumbra where judgment is unavoidable. Nobody concludes that English law is "made up" because Parliament never mentioned smartphones.

    Helpful · 1
  3. Nur Aisyah Rahman

    Fellow

    Thank you, Khalid, that's exactly what I needed. One follow-up: if the maqāṣid step weighs harms and benefits, isn't the framework consequentialist underneath?

    Helpful · 2
    1. Bilal Rashid

      Fellow

      Not really, and I think this is often misunderstood. The maqāṣid are read from the sources, as their purposes, not offered as an independent standard that can override a clear text. They make reasoning sensitive to consequences within a framework whose authority comes from revelation. A consequentialist would say outcomes are what make acts right. Al-Shāṭibī would say God's law is what makes acts right, and that law has purposes we can partly discern.

      Helpful · 3