Kafalah is a third-party guarantee agreement. In the context of Islamic finance, Kafala is used to secure loan agreements or deferred payment transactions.

Under this guarantee, a third party (guarantor) provides a guarantee for the repayment of a debt in case the debtor fails to fulfill their obligations to the creditor. If the debtor does not repay the debt, the creditor can turn to the guarantor (the third party) to obtain the outstanding amount. Kafalah provides additional security to the creditor and ensures the fulfillment of debt obligations.