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Islamic Finance


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Nahd


Arabic (نهد) for an undertaking or commitment to contributing or donating towards a common purpose or endeavor. Originally, it was used to refer to the case where the members of a group share in the consumption of different amounts of the food to which they have equally contributed. This was the usual practice of Muslim travelers who used to contribute equal amounts to the stock of food for a journey, with each of them being entitled to consume up to his/her needs. At the end of the journey, the travelers used to allocate the leftover amongst them, unless they opt to keep it for another journey.

An application of nahd is in the area of Islamic finance is the Islamic insurance contract which constitutes an act and undertaking of donation (tabarru) both parties are bound to honor. The treatment of the surplus is based on analogy (qiyas) to nahd.

Nahd is also referred to as nihd or munahadah.


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