Islamic social finance to bridge funding gap
JEDDAH, September 3, 2015
The possibility of using Islamic social finance - zakah and awqaf - to bridge the funding gap for humanitarian activities around the world were the focus of a roundtable held at the UN headquarters recently.
At the roundtable organised by the UN World Humanitarian Summit (WHS) Secretariat in New York, the Islamic Research and Training Institute (IRTI) presented findings of two Islamic Social Finance Reports.
Prof Mohamed Azmi Oman, IRTI director general and Dr Nasim Shah Shirazi, senior research economist, presented the findings of the report, which studied the trends and potentials of the sector in South Asia, South-East Asia nd Africa.
The reports identified how Islamic social finance could be better utilised to tackle poverty and other needs of the poor.
The zakah alone, if fully institutionalised, has the potential of wiping out poverty in most of the countries surveyed, it said.
Prof Omar explained that the Islamic Development Bank (IDB) has approved channeling of Islamic social finance funds towards helping people in fragile and conflict states.
The funds would be used to rebuild education, healthcare, sanitation, public facilities, public works, electricity, municipality, transportation and housing in the affected countries, he said.
WHS chief Dr Jemilah Mahmood explained that the roundtable was convened to explore alternative funding sources for humanitarian activities, following an increase in the funding gap to $7 billion last year.
There is need to tap into Islamic social finance, she said.
Firas Kayal of the UN refugee agency UNHCR noted that the world would get rid of poverty if only five percent of people pay zakah as due.
The roundtable recommended consensus building for the utilisation of Islamic social finance funds for humanitarian services; formation of zakah and waqf standards governing board; and establishing regional and global zakah and waqf institutions.
As many as 34 participants, including from the IDB, World Bank, UN agencies, and NGOs, attended the roundtable. - TradeArabia News Service
