Question:

I have friend whom I gave him money for business in his hand but he suffered a loss due to his business partner. Now he is paying back money to me , last few months he is unable to pay me back.

Now I want to help him to give him zakat money so that he can return my loan.

Is it permissible to do that?

As per his saying he doesn’t have gold or silver , only very little in the foam chain and Ring.

Answer:

In the Name of Allah, the Most Gracious, the Most Merciful.

As-salāmu ‘alaykum wa-rahmatullāhi wa-barakātuh.

In principle, if the debtor is an eligible recipient of Zakah, the creditor may give him Zakah. Thereafter, the creditor may take that money back from the debtor as a repayment of the loan. In this way, the Zakah of the creditor is fulfilled, and the debt of the debtor is fulfilled.

On the other hand, if the creditor merely forgives the loan amount and makes intention of Zakah, the Zakah of the creditor will not be fulfilled.[1]

Note: After deducting the debt amount, if your friend in reference has cash, gold, silver, business merchandise, and surplus assets equal to or more than the amount of Nisaab, then he is not eligible to receive Zakah. However, if this amount is less than the Nisaab amount, your friend is eligible to receive Zakah.

Surplus assets refer to that wealth which is not used on a day to day basis such as a second house or an investment land. The house in which one resides, the cars one drives, the furniture in the house, and one’s clothing etc. are not surplus assets as they are used on a day to day basis. The Nisaab amount is 87.48 grams of gold, which equals $4,721 as of April 21^st, 2020.

And Allah Ta’āla Knows Best

(Mufti) Abdul Azeem bin Abdur Rahman

[1] Fatawa Mahmudiyyah, Vol. 9, page 476-477 Faruqiyyah