Poverty problems can be resolved effectively through Islamic microfinance
Islamic Finance is an ideal tool of financial inclusion and can address the poverty issues in East Africa effectively, it was stated by Mr. Zubair Mughal, the Chief Executive Officer of AlHuda Center of Islamic Banking and Economics (CIBE) while addressing with eminent gathering of Banking and Financial industry of Tanzania in Dar es Salaam during a Islamic Banking and Finance event, which was organized by AlHuda CIBE, recently. The overall objective of the event was to create awareness, knowledge development and sharing the best practices of Islamic Banking and Finance with local financial market, so that Tanzanian Islamic Financial market could be established with solid footing using Shariah and technical expertise as concrete.
He inaugurated the event and delivered keynote address to the participants and said that poverty is increasing in the Muslim world at rapid pace and consequently about half of the world poverty has been confined to Muslims world, which is definitely an alarming figure. The amalgamation of interest in banking and finance industry is one of the major reasons behind this phenomenon and that’s why Muslims hesitate to avail financial or microfinance products and remain excluded from financial access as interest is strictly prohibited in Islamic. “If we want to include them into the financial inclusion, then there is an immediate need to design such financial product, which will be according to the religious and social beliefs of Muslims to include them into the financial inclusion,” he said. “If Islamic Microfinance is not introduced to resolve poverty issues from the Muslim world then world’s poverty will increase extraordinarily”. He mentioned that Islamic Microfinance is a system, it is not a religion and it can be utilized/operated by Muslims or non-Muslims for social development and poverty alleviation, but for Muslim, they have extra benefit that it is according to their religious belief but for non-Muslim it is an ideal mechanism to fulfil their financial needs. He agreed that poverty do not have any religion but it can be addressed through different guidance of Islam. He mentioned that the total population of East African Community is about 157 million, among them 35 to 40 percent are Muslim but unfortunately Muslim are mostly financially excluded due to un-availability of Islamic Financial products.
He also presented a detailed presentation on Islamic Banking and Islamic Microfinance, which discussed about; Basic Principles of Islamic Microfinance, Source of Islamic Micro Finance Product Products, Compatibility of Islamic Microfinance Products with Conventional Microfinance Models, Islamic Microfinance Products, Need Assessment of Islamic Microfinance, Opportunities & Challenges faced by IMF sector, he also emphasized the importance of Takaful in Tanzania and discussed the benefit of takaful, modalities of takaful, re-takaful and its international perspective and highlighted the future prospects for the takaful in Tanzania.
Another eminent scholar, Mr. Muhammad Zubair Usmani, Chairman of the Shariah Supervisory Board of UBL and Habib Bank, touched upon the basic principles of the Islamic Banking and available modes of Islamic products. He highlighted the Islamic Banking model, role and responsibilities of Mudarib and Musharik as ameen in the Islamic finance system. The speaker provided an overview of the Mudarabah and Musharaka sectors and discussed their performance and positive growth in terms of assets and dividend payouts. He elaborated the role and importance of Salam and Istisna and threw light on Islamic market products and Islamic fund management in Tanzania.
About AlHuda CIBE:
AlHuda Center of Islamic Banking and Islamic Economics (CIBE) is a well recognized name in Islamic banking and finance industry for research, advisory and capacity building over the last ten years. The prime goal has always been to remain stick to the commitments and provide state-of-the-art Advisory Consultancy and Education through various well recognized modes viz. Islamic Financial Product Development, Shariah Advisory, Trainings Workshops, and Islamic Microfinance and Takaful Consultancies etc. Side by side through our distinguished, generally acceptable and known publications in Islamic Banking and Finance.
We are dedicated to serve the community as a unique institution providing services not only in UAE/Pakistan but all over the world. We have so far served in more than 25 countries for the development of Islamic Banking and Finance industry so far.