LAHORE - Captured with profit urge, the Islamic banking and finance has almost been confined to the rich and well-off class, discriminating the underprivileged populace, as the share of Islamic microfinance is less than 1 per cent of the total volume of $1.3 trillion of Islamic finance industry.
This was stated by Chief Executive Officer of Al Huda Centre of Islamic Banking and Economics, Zubair Mughal. Talking to The Nation, he said that commercialism has captured Islamic financial institutions in such a way that business with and financing to the poor has gone astray from their agenda.
Quoting the figures of Consultative Group to Assist the Poor (an associated institution to the World Bank), the global volume of Islamic microfinance has reached $800 million with serving about 1.3 million beneficiaries. While as per the latest research, conducted by Al Huda Centre of Excellence in Islamic Microfinance, the global volume of Islamic microfinance has reached $1 billion. Total number of Islamic Microfinance Institutions is more than 300, operating around the globe while the share of Islamic Microfinance is less than 1 per cent from the overall volume of $ 1.3 trillion of Islamic Finance Industry, which, itself, is a big question mark on Islamic finance industry and proving its misfortune. “These facts and figures give rise to different question such as: is social segmentation between poor and rich 1 per cent: 99 per cent? Does Islamic Finance have financial resources only for the rich people? Not for the Poor? Is Islamic Finance an option only for the particular segment of society? Is it justice system of Islam? whereas the answers to all these questions are in negative and awful, definitely.” He said that as per the analysis of Islamic Finance in the light of Islamic teachings, we get into, the Islamic ideology of finance aims at justice, cooperation, welfare of the poor and financially deprived people of society with its best principles. Islam is a name of revolution starting from poor and will ending at same. If we have a look at comparative study of different religions regarding the view point of poverty, then we come to know that poverty alleviation is not only the social responsibility in Islam rather a religious obligation as well, he added.
Zubair Mughal said that Zakat, Charity, Sadqa, Fitr, Usher and Qarz-e-Hasan etc are amongst the key religious responsibilities of Muslims, whereas it is a social responsibility in other religions rather than a religious one which recognized as branded name of “Corporate Social Responsibility” (CSR), and they doing good work for poverty alleviation and social development in the whole world, but unfortunately, Islamic Financial Industry have forget its social or religious responsibilities.
If we look at the world poverty, we get surprising facts and figures. The 46 per cent of whole world poverty exists in Muslim World while Muslim population in the world is 26 per cent. United Nations have marked 26 out of 57 member countries of OIC, as the least developed countries.
CEO of Al Huda Centre lamented that current statistical information is highlighting that the poverty in the Muslim World is increasing day by day which is, as per the serious observation, caused by none or least response of poor people to Microfinance facilities because of interest, none or limited Islamic Micro Financing facilities provided by Islamic Financial Institutions and the least attention and interest of International Donor Agencies (UNDP, World Bank, IFC) towards Islamic Microfinance which, in return, is throwing the Muslim world into an era of poverty. He said that the optimal results for the economic prosperity of Islamic Finance can be ensured if Islamic Microfinance Institutions established by the Islamic Finance Industry.