Lending money to other people to ease their difficulty is a distinctive characteristic of a Muslim. It is a kind of social solidarity and cooperation on that which is good and righteous. No doubt that the one who eases the difficulty of the insolvent receives a generous reward from Allah Almighty. The Prophet (peace and blessings are upon him) says, “He who lends a single dinar, will receive a reward equal to giving half a dinar in charity.”
Commenting on the same issue, Sheikh `Abdul Majeed Subh, a prominent Azharite scholar, says, “Islam always pays great attention to the social dimension. In order not to hurt the feelings of the insolvent debtor, the creditor may kindly relieve him from paying back the debt he owed him, especially when he intends to transform the amount of debt to Zakah. It is a magnanimous gesture of the creditor not to tell the debtor that he is going to shift the amount of debt into Zakah.”