Answered by Shaykh Jamir Meah
Question: Assalam Aleykum.
1.If someone asks for a loan, can I raise some of the amount through charity without disclosing it to the person in need?
2. If the person pays back the money, can I use it for another good cause or let the person keep the money as charity?
Answer: Assalam alaykum. Jazakum Allah for your question. May Allah reward you for helping your relative in need and desiring to do so in the proper way.
1: Whenever other people’s money is involved, the general rule is that everyone concerned should be clear on the situation and the terms upon money is exchanged.
Raising charity from personal contacts without disclosing the person in need
You would be permitted to give your relative the money without disclosing where the money came from, as it is not obligatory to disclose the source of money in obligatory zakat or voluntary charity [Bushra al Karim].
However, when giving the money to your relative, you should tell them that the money is being given as either a loan to be paid back, or a gift for them to keep, so they know what is due upon them, or not, and does not cause undue hardship for them.
2: The answer to this part of your question depends on what is said to your contacts who will donate their money. It is best never to assume anything when it comes to other people’s money.
Therefore, tell your contacts the nature of the request and discuss the options. For example, you tell them there is someone who is genuinely in need and wants to borrow money. If they offer to help, you should discuss:
1. Is the money being given as a gift for the relative to keep or a loan? If it is a gift, then you may keep your personal amount and let the relative keep the rest. If it’s a loan, then see point 2 below.
2. If the contacts are given the money as a loan, or the relative insists in paying the money back despite telling them it’s a gift, do the contacts want the money back or would they like you to give the money to another genuine charitable cause? In either case, you are entitled to take back the portion owed to you, but must dispense of the remaining money in whatever way each contact has directed.
By being very clear and open from the outset and allowing others to dictate what you should do with the money they give, there is no chance of you falling into error.
Though not obligatory, it would be highly recommended to have two witnesses witness any exchange of money and the terms of the exchange, as well as having it in writing, particularly if it is a large amount of money.
Warmest salams,
[Shaykh] Jamir Meah
Shaykh Jamir Meah grew up in Hampstead, London. In 2007, he traveled to Tarim, Yemen, where he spent nine years studying the Islamic sciences on a one-to-one basis under the foremost scholars of the Ribaat, Tarim, with a main specialization and focus on Shafi’i fiqh. In early 2016, he moved to Amman, Jordan, where he continues advanced studies in a range of Islamic sciences, as well as teaching. Jamir is a qualified homeopath.