Zakat on Money You Have Lent Out

Short answer: Yes. A receivable from a solvent, acknowledging borrower is a 'strong debt' — it is your wealth sitting in another's hand. Each year on your zakat day, add it to your other wealth and pay 2.5%. If paying now strains you, you may defer and settle all accumulated years upon collection — the liability remains owed. Details: Uthman (ra) would announce in the zakat month: reckon your receivables with your wealth and pay — with no objection from the Companions present. The basis: a collectible receivable functions like cash in hand. A receivable from an insolvent or denying debtor is a 'weak debt' with a different ruling (see the next fatwa). Evidence: Quran 9:103; Sahih al-Bukhari 1454 (2.5% on money); the athar of Uthman (Muwatta Malik, Zakat); Shaykh Ibn Baz and the Permanent Committee on yearly zakat for strong debts. For complex individual cases, consult a qualified scholar.