Madani terms Zakat, Sadaqat, Awqaf as Islamic social finance

Istanbul,—In the special session on Islamic Social Finance at the World Humanitarian Summit in Istanbul on 23 May 2016, the Secretary General of the Organization of Islamic Cooperation (OIC), Iyad Ameen Madani, stated that the culture and traditions of Islamic giving has been and continues to be a crucial element in dealing with global humanitarian needs. “People in the Islamic world have been extremely generous despite the poor economic conditions in many countries in the Islamic world,” he said. Madani pointed to the scarcity of financial resources as a result of the global economic situation and huge humanitarian demand, which is particularly troubling, as the global funding gap for humanitarian needs has reached US$ 7 billion in 2014. Furthermore, there is a need to have a renewed view of burden sharing particularly that developing countries host over 86% of the world’s refugees, compared to 70% ten years ago with huge implications on development efforts. The OIC Secretary General referred to the high-level panel on humanitarian financing established by the UN Secretary General. Madani said that OIC shares the basic premise of the report of the high-level panel, namely, that the objective should be to reduce needs, deepen and broaden the resource base, and improve the efficiency of delivery of humanitarian assistance.
He went on to explain Islamic Social Finance, which focuses on three segments of Islamic giving, Zakat (one of the 5 pillars of Islam it is a form of alms or religious tax), Sadaqat (charitable giving) and Awqaf (endowment), as well as cooperative-based social finance and contemporary Islamic microfinance to deal with poverty alleviation and bridging the development-financing gaps.
Madani said that Sadaqat and Awqaf are much more flexible in their use from a religious point of view and are already extensively used in humanitarian and developmental purposes.
As for Zakat, although already a significant source of humanitarian financing, it remains in need for more in depth analysis, more innovative concepts and more unified interpretation.
Within the OIC, the Islamic Development Bank (IDB) and the Statistical, Economic and Social Research and Training Center for Islamic Countries (SESRIC) are working towards that objective with remarkable success.—Email

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