Hawalah

This entry focuses on hawalah (or hiwalah) as a concept of Islamic finance and as a practice that applies to the transactions within the scheme of Islamic finance and economics. Hawalah is one of the conventional types of sale contracts that bear resemblances with the current practices and applications in the contemporary commerce settings. Hawalah is a particular form of sale contract that involves the transfer of the debt to a third party in a way to absolve the original debtor from their obligations under the initial contract. The entry compares and contrasts this practice with the modern counterparts for a better understanding of how the logic of Islamic finance operates.