Suftaja/h

Abstract

In the early days of Islam, a negotiable instrument was commonly utilized to mitigate the perils of travel and facilitate payments. One of these financial instruments is the suftaja. The history of the use of suftaja dates back to pre-Islamic Ancient Egypt. Typically, it is issued between the drawer, beneficiary, and counterparty; these documents include information such as the payment amount, payee, date, and the name of the jahbez who issued the payment order. Jahbezes receive a commission in exchange for discounting the surface documents. The legitimacy of suftaja is a controversial issue in Islamic jurisprudence, where some jurists consider it as qarz while others see it as a policy. Differences of opinion among schools of jurisprudence exist on the subject. The practice of suftaja can be traced back to ancient Egypt. Records of the Prophet of Islam and his Companions indicate the practice of suftaja in the early Islamic period, as evidenced by the approval or rejection of some suftaja-like transactions. In the Abbasid period, suftaja was utilized for payments from local baytulmâl to the central treasury and merchants. Presently, modern Islamic financial institutions continue to employ suftaja as a viable financial mechanism.