Allah (swt) diagnosticates a disease and prescribes treatment for it. So, what treatment has been prescribed by the Holy Quran in this verse?
(… وإِن كَانَ ذُو عُسْرَةٍ فَنَظِرَةٌ إِلَىٰ مَيْسَرَةٍ ) (And if someone is in hardship, then [let there be] postponement until [a time of] ease …): This is a good loan when someone is insolvent and in distress so that they cannot repay the loan they borrowed on time. Islam doesn’t only consider the economy which is an integral part of the social movement of people and a main pillar of societies. Nowadays, it is well known that most of the problems among people are due to financial transactions; Prophet Muhammad (saws) said:
“there is a Fitnah (trial) for every nation (or Ummah) and the trial for my nation is wealth.”
Anyway, if the borrower is insolvent and cannot repay the dues, then wait for them until they are capable of repaying the loan. What a great divine legislation!
( وَأَن تَصَدَّقُوا خَيْرٌ لَّكُمْ ۖ إِن كُنتُمْ تَعْلَمُونَ … ) (…But if you give [from your right as] charity, then it is better for you if you only knew): This issue doesn’t stop at the issue of giving time to the insolvent till they are capable of repaying; we also have: (But if you give [from your right as] charity,) which means to completely forgive it. This is an elevation of fiducial perfection. You should not ask the needy to pay the loan at a specific time when they are insolvent. Besides, it’s better if you can forgive and give the loan in charity to them. The economy in Islam is based on three things: supply, obligation and loan.
A good loan is under the conditions stated above in the verse. What is ‘supply,’ then? It is to provide the needy with a charity. Charity, however, is neither an economic nor a commercial transaction; doesn’t involve credit or usury; and is rather an act of charity.
Again, Islamic economics is based on the supply through charity at first. Then, there is the obligation which is paying Zakat. Allah (swt) has made a sufficient portion in the wealth of the rich to satisfy the poor. Thus, it is a matter of related to the economic movement of the society, as the Almighty has allocated a legitimate portion of the rich’s wealth for the poor. On the other hand, some scholars argue that whoever does not pay Zakat is considered as a thief because they have stolen that legitimate portion of money for the poor.
How come that such a religion (Islam) is accused of being a religion of cruelty and terrorism because of some people who have defamed and misrepresented Islam. Islam states that when a creditor finds a debtor in distress and incapable of repaying a loan, the creditor can waive off the loan as a charity. This is a religion that elevates in the perfections of faith so that the economy is made in this manner. Still, there is an important point that Prophet Muhammad (saws) highlights:
“Abu Huraira (may Allah be pleased with him) narrated that the Prophet (peace be upon him) has said: ‘Whoever takes the money of the people with the intention of repaying it, Allah will repay it on his behalf, and whoever takes it in order to spoil it, then Allah will spoil him.’”
When you borrow and want to repay a loan, Allah (swt) will support you to pay it back. This is one of the incentives for the economy.
 Hadith no. 3223, Chapter Halal money collection and respective issues, Zakat Vol. Sahih Ibn Habban
 Hadith no. 2257, Chapter: Borrowing money from people, Loans, Payment of Loans, Freezing of Property, Bankruptcy Vol. Sahih Al-Bukhari.