Editing Islamic banking and finance (section)

====Late payments/defaults====
While in conventional finance late payments/delinquent loans are discouraged by interest continuing to accumulate,{{sfn|Khan|2013|pp=207-208}} according to Ibrahim Warde, 
<blockquote>Islamic banks face a serious problem with late payments, not to speak of outright defaults, since some people take advantage of every dilatory legal and religious device ... In most Islamic countries, various forms of penalties and late fees have been established, only to be outlawed or considered unenforceable. Late fees in particular have been assimilated to riba. As a result, 'debtors know that they can pay Islamic banks last since doing so involves no cost'<ref name="IFGE2010:163">[[#IFGE2010|Warde, ''Islamic finance in the global economy'', 2000]]: p.163</ref>{{sfn|Khan|2013|pp=207-208}}</blockquote> 
A number of suggestions have been made to deal with the problem.{{#tag:ref|At least in theory late fees may be Islamically justified if they are donated to charity.<ref name="Edward Elgar"/><ref name="kettell-38"/><ref name="al-yusr"/> suggests that 'the problem of bad debts be solved by a "cooperative insurance" to which borrowers contribute'.<ref>Siddiqi, Mohammad Nejatullah, ''Muslim Economic Thinking: A Survey of Contemporary Literature'', The Islamic Foundation, Leicester, 2007, p.36</ref>|group=Note}}