IMPACT OF THE CHANGE OF TIME ON MONEY VALUE WITH REFERENCE TO THE AL-QARD AL-HASAN PRACTICE

Abstract

This study aimed to analyze the impact of the change in the time value of money, particularly in reference to the Islamic financial notion of Al-Qard Al-Hasan. The study had discussed on the value of money in long term loan changes with time which leads to its appreciation or depreciation. In the case of depreciation of the value, the lender was losing the difference between the principle and new value. A serious hindrance in the application of Al-Qard Al-Hasan in the context of Islamic finance practices due to the violation of certain clear Fiqh rulings. This study had argued that Muslim scholars have offered various solutions to this problem, which potentially makes Al-Qard Al-Hasan appear as an effective financial device for borrowing and lending money without necessarily falling into any established prohibited practice. The data of this study has been drawn from the secondary source of the Islamic jurisprudence (Fiqh) where contemporary Fiqh literature has been closely studied as well as interviews with some contemporary Islamic scholars and experts. The findings revealed that Islamic scholars and contemporary experts had different views on this matter which need different solutions to the issue