Islamic FinTech is a branch of financial technology that focuses on developing innovative digital solutions for the financial needs of the Global Muslim community, while adhering to the principles of Islamic finance. Islamic finance is a system of finance that operates in accordance with the principles of Islamic law (Shariah), which prohibits interest-based transactions (riba), speculative or unethical investments, and any activities deemed harmful to society or the environment.

Islamic FinTech seeks to provide financial services that are compliant with Islamic principles, while leveraging the power of technology to make financial transactions more efficient, convenient, and accessible. Some examples of Islamic FinTech solutions include digital payment platforms that enable cashless transactions in compliance with Islamic law, crowdfunding platforms that facilitate Shariah-compliant investments, robo-advisory services that offer investment advice based on Islamic principles, and blockchain-based solutions that provide greater transparency and security in Islamic finance transactions.

Overall, Islamic FinTech is a growing industry that aims to address the unique financial needs of the Muslim community, while also promoting financial inclusion and social responsibility.

Conventional FinTech and Islamic FinTech differ in several ways, mainly due to the distinct principles and regulations governing their operations. Some key differences are:

Compliance with Shariah Principles: Islamic FinTech platforms must adhere to the principles of Islamic law (Shariah) when designing and delivering their products and services. This means that any financial transactions conducted through Islamic FinTech platforms must comply with Islamic principles, such as the prohibition of interest-based transactions (riba), speculation, and unethical investments.

Target Audience: Conventional FinTech platforms cater to a broader audience, while Islamic FinTech focuses on serving the specific financial needs of the Muslim community. Islamic FinTech platforms aim to provide Shariah-compliant solutions for Muslims seeking financial products and services that align with their religious beliefs.

Ethical Considerations: Islamic FinTech platforms prioritize ethical considerations when designing their products and services. For example, they may avoid investing in industries that are considered harmful to society or the environment, such as tobacco, gambling, or weapons.

Regulatory Framework: Islamic FinTech is subject to a specific set of regulatory frameworks that govern the operations of Islamic financial institutions. This includes Shariah supervisory boards that oversee compliance with Islamic principles and regulations, as well as regulatory bodies that oversee the overall operations of Islamic FinTech platforms.

Product Offerings: Islamic FinTech platforms offer a range of Shariah-compliant financial products and services that are tailored to the specific needs of the Muslim community. These include digital payment solutions, investment platforms, crowdfunding, and robo-advisory services, among others.

Both conventional FinTech and Islamic FinTech share similarities in their use of technology to provide innovative financial solutions, Islamic FinTech operates within a specific ethical and regulatory framework that distinguishes it from conventional FinTech.

There are many companies that are offering Islamic FinTech services across different regions. Some of the notable companies offering Islamic FinTech services include:

Wahed Invest: A US-based robo-advisory platform that provides Shariah-compliant investment solutions to clients.

FINTERRA: A Singapore-based technology company, developing blockchain based FinTech, and Islamic FinTech platforms in the space of Crowdfunding, E-Wallets, Microfinance, Wealth Management, Charity & Endowment Management.

Zoya: A US-based app that helps consumers find Shariah-compliant financial products and services.

HAL CAPITAL: An Kenya and Oman based B2B microfinance platform that provides Shariah-compliant (Murabaha) financing solutions.

Alinma Bank: A Saudi Arabian bank that offers a range of Shariah-compliant digital banking services.

SalamWeb: A Malaysia-based web browser that provides a Shariah-compliant internet experience.

Amanah Finance: A UK-based company that provides Shariah-compliant home financing solutions.

Finocracy: A UAE-based company that provides Shariah-compliant robo-advisory services.

HalalZilla: A Malaysia-based app that helps users find halal-certified restaurants and products.

Tazapay: A Singapore-based digital payment platform that provides Shariah-compliant payment solutions.

These are just a few examples of the companies offering Islamic FinTech services. The industry is constantly growing, and new players are emerging in different regions, offering innovative solutions that cater to the unique financial needs of the Muslim community.

The adoption of Islamic FinTech has been steadily increasing globally, reflecting the growing demand for Shariah-compliant financial products and services. Some indicators of the success and adoption of Islamic FinTech include:

Growing Market Size: The global Islamic finance industry is estimated to be worth over $2 trillion, with a compound annual growth rate (CAGR) of around 5%. This represents a significant market opportunity for Islamic FinTech companies to tap into.

Increasing Investment: Islamic FinTech companies are attracting increasing investment from venture capitalists, angel investors, and other sources of funding. This indicates a growing recognition of the potential of Islamic FinTech to disrupt the traditional financial industry and offer innovative solutions to meet the needs of the Muslim community.

Government Support: Governments in Muslim-majority countries such as Malaysia, Indonesia, and Saudi Arabia are actively promoting the growth of Islamic FinTech, providing regulatory support and funding to help the industry flourish.

Rise of Islamic Banking: Islamic banking, which is a key component of the Islamic finance industry, is also growing globally. Many Islamic FinTech companies are partnering with Islamic banks to provide innovative digital solutions to their customers.

Consumer Demand: There is a growing demand from Muslim consumers for Shariah-compliant financial products and services that align with their religious beliefs and ethical values. This is driving the adoption of Islamic FinTech solutions across different regions.

The success and adoption of Islamic FinTech is evident from the growing market size, increasing investment, government support, and consumer demand. As the industry continues to evolve and innovate, we can expect to see further growth and adoption of Islamic FinTech solutions globally.

While Islamic FinTech is a growing industry with many opportunities, there are also several key challenges that companies operating in this space face. These challenges include:

Regulatory Compliance: Islamic FinTech companies need to comply with the specific regulations and guidelines governing Shariah-compliant financial products and services. This requires the expertise of Shariah scholars and can be time-consuming and costly.

Lack of Standardization: There is currently no globally accepted standard for Shariah compliance, which can make it challenging for Islamic FinTech companies to operate in different regions and attract a diverse customer base.

Education and Awareness: Islamic FinTech companies need to educate their customers about the principles of Islamic finance and how their products and services are Shariah-compliant. This can be challenging, especially in regions where the awareness of Islamic finance is low.

Technology Infrastructure: Islamic FinTech companies need to invest in technology infrastructure to ensure that their platforms are secure, reliable, and can scale to meet the needs of their growing customer base.

Access to Funding: While Islamic FinTech companies are attracting increasing investment, access to funding can still be a challenge, especially for startups in the early stages of growth.

Competition: Islamic FinTech companies are competing against both traditional financial institutions and conventional FinTech companies. This means that they need to differentiate themselves by offering unique value propositions and innovative solutions.

While Islamic FinTech companies face several challenges, the growing demand for Shariah-compliant financial products and services, along with the increasing support from governments and investors, presents significant opportunities for the industry to grow and innovate.

The future of Islamic FinTech companies looks promising, as the industry continues to grow and evolve. Here are some of the key trends and developments that we can expect to see in the future of Islamic FinTech:

Innovation and Disruption: Islamic FinTech companies will continue to innovate and disrupt the traditional financial industry by offering unique value propositions and solutions that cater to the needs of the Muslim community.

Increasing Adoption: As awareness of Islamic finance and Shariah-compliant financial products and services grows, we can expect to see increasing adoption of Islamic FinTech solutions, both in Muslim-majority countries and in regions with significant Muslim populations.

Regulatory Support: Governments in Muslim-majority countries will continue to provide regulatory support for Islamic FinTech, which will help to create a more favorable business environment and promote the growth of the industry.

Investment and Funding: Islamic FinTech companies will continue to attract increasing investment and funding from venture capitalists, angel investors, and other sources of funding, which will help to fuel innovation and growth in the industry.

Partnership with Traditional Financial Institutions: Islamic FinTech companies will increasingly partner with traditional financial institutions, such as Islamic banks, to provide innovative digital solutions that complement their existing products and services.

Global Expansion: Islamic FinTech companies will expand their operations globally, tapping into new markets and demographics, and offering Shariah-compliant financial products and services to customers around the world.

Future of Islamic FinTech looks bright, as the industry continues to grow and innovate, driven by the increasing demand for Shariah-compliant financial products and services, government support, and investment from venture capitalists and other sources of funding.

Islamic FinTech – An Evolution, or a Revolution! was originally published in The Finterra Publication on Medium, where people are continuing the conversation by highlighting and responding to this story.

To understand this article, it is imperative for readers to be aware of the primary importance of Waqf. In Islam, Waqf is primarily established as a source to improve the overall socio-economical welfare of society. This establishes its role as somewhat of a reminder to the wealthy members of the society whose wealth should be given out voluntarily to assist the underprivileged.

Considering the relevance of Waqf in societal development, it is reasonable that administrative bodies are conditioned to cater to the smooth running of Waqf assets. Various countries- Muslims and Non-Muslims both-have organised mediums to govern Waqf assets and these mediums could differ between countries.

Despite its diverse application, the primary function of a Waqf administrator is to organize and overlook the development and longevity of the Waqf asset. However, there are a few problems facing this department among which are:

1. Lack of funding: this is arguably the biggest challenge faced by Waqf administrators. For Waqf properties to be efficiently utilized, there must be adequate funds that would see to that effect. In most instances, Waqf administrators are not funded by the state or government of the country and thus have to rely heavily on contributions from individuals which cannot be considered as stable or dependable
2. Lack of infrastructure: another problem would be the lack of infrastructure to carry out certain operations which most Waqf administrations are facing. This could also be as a result of the insufficiency of their funds that renders them incapable of catering to their management and operations as well as acquiring necessary infrastructure.
3. Public ignorance: A large variation of the public still remains ignorant of the importance of Waqf in the society and even more the relevance of establishing an effective Waqf administration.
4. The high rate of corruption: Lastly, due to the overall lack of accountability, negligence of law and order and other deficit plaguing most administration. Corruption is let to brew, and this has seen to the increase in its frequency.

These problems although critical could be resolved or contained by the adaptation of precise accountability criteria, firm legal presence, regular government or state involvement in the affairs of Waqf administrations, propagation of activities that would enhance the public’s awareness of Waqf and the role of Waqf administrators and lastly, identifying mediums that would increase the funds they receive.

In conclusion, Finterra, as a FinTech company, is aiding in tackling these problems by providing a platform that brings various stakeholders in contact with the Waqf administrators. This would help in giving them access to funds, solving the issue of lack of transparency and accountability and even bring an end to corruption.

Waqf Administration: Problems and Solutions was originally published in The Finterra Publication on Medium, where people are continuing the conversation by highlighting and responding to this story.

A little trip back in history to the year 800AD would help bring into the perspective the first instance of Waqf being used to start a university — the famously known Al-Quarawiyyin University in Morocco. Before the narration of that, it would help to give a brief tale of the great woman behind it.

Fatimah Al-Fihriyyah was a lady born into the Arab descent of Qurraysh in Tunisia in the year 800AD. Although she was born in Kairouan, she migrated with her family to the town of Fes in Morocco. Her family made sure to educate both she and her sister in the fields of Islamic Jurisprudence, Fiqh and Hadith.

Her philanthropic ambition started after the death of her father. In the year 859AD, she had the intention to give back to her society and so she used her inheritance to begin the construction of the Quarawiyyin mosque. Upon its completion, she decided to extend the mosque to cater to an additional building which was called a Madrassa and which is known today as the University of Quarawiyyin.

After its establishment, the university was opened to both female and male students. Its initial curriculum was focused on instilling religious knowledge on its students. It offered courses in Quranic memorization. However, it later added other courses such as Arabic grammar, music, Sufism, medicine and astronomy. More advancements were introduced later in 1947 when its integration into the states’ education system prompted it to include courses in Physics, Chemistry and the languages of other foreign nationalities.

Similarly, its curriculum evolved further as the years went by. As at 1963, it joined the modern state university system and by 1965, its initial name of ‘al- Quarawiyyin’ opted for its official and current name ‘University of al- Quarawiyyin’ which can be translated to mean the university of the people of Quarawiyyin.

The university has been deemed the oldest existing, continually operating institution in the world by UNESCO, it also has scored itself a place in the Guinness World Records and, oftentimes, scholars refer to it as the oldest university.

Albeit all its success stories and rich history, this establishment suffers from a lack of acknowledgment. This is apparent when the discussion of successful waqf models arises, opponents and proponents alike are quick to mention famous establishments such as Harvard and Oxford and side-line one that even preceded them.

This more than anything is the reason why the existence and contribution of the university of Al-Quarawiyyin to the development of various waqf models should be propagated. And why talk of this establishment should be embedded in the mainstream discussion concerning Waqf.

To conclude, Finterra as a fintech company that is also in the business of propagating Waqf attests to the outstanding contribution of this establishment. In that, Waqf is only what it is today as a result of what it was yesterday, and so gratitude must be given to those who were responsible for upholding its true essence.

THE FIRST WAQF UNIVERSITY: The Story of Fatimah Al Fihriyyah and the Establishment of Al… was originally published in The Finterra Publication on Medium, where people are continuing the conversation by highlighting and responding to this story.

When cryptocurrencies first erupted worldwide, it mainly focused on digitizing banking and financial sectors. Not many predicted how far it would range in terms of industries and sectors in the business landscape. Today, experts believe that blockchain plays a key role in the New Digital Economy.

The digital economy is run by the internet. 54.4% of the world’s population is online, 42% use at least one social network and 68% are on mobile. The knowledge accessible to the public, mostly for free or at a low cost, is unlimited. Not to mention the power of how the internet brings people from every corners of the world together. It has led to greater connectivity and easier transactions between consumers and business, thus destroying traditional industries and paving the way for new ones. Now there is talk of a new digital economy, one that is run using the blockchain technology.

Digital transformation has not only changed our individual lives. It has led to a change in the global economy.

“The backbone of the digital economy is hyperconnectivity which means growing interconnectedness of people, organisations, and machines that results from the Internet, mobile technology and the internet of things (IoT).”

— Deloitte

According to the Research Institute, 90% of the revenue generated in the digital economy is done by nine companies: Apple, Google, Facebook, Amazon, Microsoft, Baidu, Alibaba, Tencent and Xiaomi.

Connectivity

The internet has been compared to the invention of the printing press in the 15th century, where information was accessible to everyone in the public. This led to people becoming more connected to one another.

The internet has already created so many changes in how we operate in our daily lives, in terms of booking a car to go to a specific destination or grocery shopping. A lot of the processes are already digitalised.

Digital Economies

Cities like Dubai and Amsterdam are becoming smarter. Its digital infrastructure creates good connectivity between companies and people through extensive fibre connectivity and internet exchange points.

The rest of Europe and Asia has also made great efforts to becoming more digitalised. Estonia, for instance, has presented the idea of digital citizenship. Germany, with its strong economic performance and experience in creating industrial growth, will also profit from the fourth industrial revolution.

Blockchain in the New Digital Economy

The key to the future of the digital economy is a secure, low-latency digital infrastructure. Many of the activities we are performing today will be performed between interacting machines tomorrow, taking the digital economy to the next level. And even though it is still in the early stages, blockchain technology is already playing a major role in this. Many believe that if society wants to take advantage of the full potential of the internet, the fundamental structure needs to be blockchain technology.

It is important to note that technological transformation processes typically take time to be adopted by the masses. With blockchain, the cost of transactions could be reduced dramatically and this has the potential to become the system of record for all transactions.

In that case, the global economy could once again undergo a profound shift. Blockchain-based sources of influence and control could appear. Crucially, though, it is not a ‘disruptive’ technology — it is a foundational technology. Blockchain has the potential to create new foundations for our economic and social systems.

Blockchain is not a ‘disruptive’ technology — it is a foundational technology. Blockchain has the potential to create new foundations for our economic and social systems.

— Research Institute

“Blockchain is Good — Cryptocurrencies are Bad”

Blockchain is the technology behind cryptocurrencies like Bitcoin, Ethereum, Ripple and so on, but cryptocurrencies are just a byproduct of blockchain. This has led to the opinion by many nations that “blockchain technology is good while cryptocurrencies are bad.”

Nonetheless, cryptocurrency is still just one of the many applications of blockchain technology. If you look at the countries (e.g. China) that are implementing strict regulations or banning cryptocurrencies are also avid supporters of the blockchain technology because the potential of the technology is too great to ignore.

One of blockchain’s main features is its transparency, which helps different parties verify data whilst also eliminating security issues. Governments and some businesses hold information such as full names, social security numbers, birth dates, addresses and so on, which makes them a good target for hackers. Single-point-of-failure-risk could be avoided and minimised through blockchain technology, where data is embedded cryptically and stored in shared databases, protected from deletion, tampering and revision. Every agreement, every process, every task and every payment would have a digital record and signature that could be identified, validated, stored and shared.

Conclusion

Advanced technologies like blockchain have the potential to transform governmental and business systems on a global scale. As we discussed, many countries like Dubai, Finland and Estonia are already adopting the technology to create “smart cities” while companies like Finterra, IBM and Ford are utilising the blockchain technology to enhance efficiency, transparency and accountability in their businesses.

Why It’s Time to Start Talking About the New Digital Economy? was originally published in The Finterra Publication on Medium, where people are continuing the conversation by highlighting and responding to this story.

In Islamic Law (Shari’ah), there are two primary sources, namely, the Qur’an and the Sunnah of the Holy Prophet (SAW). As for the permissibility of Waqf, there is no direct evidence from the Qur’an and the Sunnah. Muslims derive the Shari’ah legitimacy of Waqf based on its permission by the Holy Prophet (SAW) during his lifetime. The legal characteristics of waqf have been developed by Ijma’ (consensus among jurists) over the years. This article will highlight these characteristics.

The most important characteristics of waqf in Islamic Law are the existence of a founder (waqif), beneficiary, declaration and specific property to be converted to waqf. The waqif must be sane and have attained the age of puberty. As for the declaration, it may be written or made verbally. The beneficiaries of a waqf should be legitimate. The most important condition for the legitimacy of the waqf property is perpetuity in order to yield long-lasting benefits. The waqf property could be immovable such as real estate or movable such as cash. One element of the permissibility of cash waqf is that the Muslim community has evolved and there is a need for flexible waqf options to maintain existing waqf properties.

Waqf in Islamic Law, once endowed, is subject to certain restrictions apart from perpetuity. These are irrevocability and inalienability. Irrevocability means that once a waqf property is endowed, the declaration cannot be rescinded upon. Inalienability means that after a waqf property is endowed, it cannot be transferred away from the beneficiaries or diverted to, say, the heirs of the waqif.

The sale or exchange of a waqf property is allowed in Islamic Law. These two ensure better alternatives for the perpetuity of a waqf.

Having said that, if you are looking for a platform to contribute to waqf or even reading more about what we do, go to Finterra’s WAQFChain.

The Characteristics of Waqf from the Shari’ah Point of View was originally published in The Finterra Publication on Medium, where people are continuing the conversation by highlighting and responding to this story.

There a several ways to build the Muslim community. One of them is through waqf. When administered and managed effectively, as it is done using Finterra’s WAQFChain platform, waqf has the potential to empower the community among other benefits.

One way of empowering the community is through employment. With waqf tools, funds can be provided to make promising businesses flourish. With this comes the ripple effect for a more productive society, reduced poverty and prosperity in the society.

Another way waqf can empower the community is by providing education. Waqf is not just reserved for mosques, cemeteries or Tahfiz schools. Conventional education can also be provided through waqf. There is no doubt that education empowers the community.

A third way waqf can be used to build the community is by providing healthcare. A healthy population is more productive and will automatically become more prosperous. A healthy society also experiences a ripple effect for greater benefits in education.

A fourth way in which waqf can be used to build the Islamic community is by providing housing. A good example of this is in Penang, Malaysia, where the State Islamic Religious Authority partnered with a property developer to come up with a profit-sharing venture to provide housing.

A fifth way waqf can be utilised in building the Islamic community is through the redistribution of wealth.

A sixth way waqf can be used to build the Islamic community is by providing physical infrastructure such as roads, bridges and parks. One advantage of waqf providing these facilities is that it reduces the Government’s financial burden and frees up resources for other uses.

Building Islamic Social Community using Waqf was originally published in The Finterra Publication on Medium, where people are continuing the conversation by highlighting and responding to this story.

We are living in an extraordinary time in history. The rise of blockchain technology is bound to enhance our lives the same way the Internet did. The Internet made so many things, previously impossible, possible. We are witnessing the same being done with blockchain. As more use cases are presented, it became evident that the technology was going to reinvent systems across the board, whether it is in banking, healthcare or even entertainment.

Protecting data from manipulation or fraud

If you are familiar with the world of blockchain, you have probably heard of the word “immutability” used to describe blockchain platforms like Finterra and its products. Basically, to be immutable, the data stored on a blockchain ledger cannot be changed. Ever. Each block of information, such as facts or transaction details, is stored using a cryptographic principle or a hash value. This functionality of the technology ensures that no hacker can break into the system or change the data saved to the block.

Protecting data from theft

One of the most exciting features of blockchain is its decentralized nature. This makes it near impossible for hackers to commit fraud and steal or compromise data stored on the blockchain platform. This is because a hacker would have to destroy the data on every user’s computer in the global network. If there are a million computers each storing a copy of the data, a hacker would not be able to compromise the network of a million computers all at once. Not to mention, it is not easy to hack a blockchain platform once, to do it multiple times would be near impossible. The protection this feature provides is one of the reasons businesses look to implementing the blockchain technology, even in different industries.

Stopping Distributed Denial of Service attacks

The principle behind Distributed Denial of Service (DDoS) attacks are not new but just as relevant today. Recent attacks show that the classic method is resilient against most cybersecurity measures, and it has become a major concern for enterprises and private consumers alike. DDoS attacks rely on a centralised server to be successful, and blockchain is known for its decentralisation. As mentioned by three researchers in a survey paper titled “Utilization of blockchain for mitigating the distributed denial of service attacks”, blockchain provides decentralized processing infrastructure wherein single point of failure is preventable.

Moving Forward

It is apparent that blockchain is the future of cybersecurity. With its ability to provide transparency, immutability and enhanced security, this technology is being adopted by more businesses and individuals who wish to be protected from cyberattacks. Blockchain-based organisations like Finterra realised the potential of this distributed ledger technology early on and began working on building an impenetrable blockchain platform. Today, its blockchain is utilised by various companies looking to provide services, streamline the processes, and secure the data stored.

How Does Blockchain Prevent Cyberattacks? was originally published in The Finterra Publication on Medium, where people are continuing the conversation by highlighting and responding to this story.

There are several reasons why Waqf exists in Islam. This article attempts to explain some of the reasons why Muslims need the Waqf system. These reasons are explained as follows:

• Firstly, one reason is to build religious infrastructure such as mosques and Madaris (plural of Madrasa) for Muslims in the West where non-Muslims are the majority and the Governments do not provide such services.
• Secondly, since most Muslim countries are beset with high rates of poverty and income inequality, Muslims need the waqf system in order to reduce poverty and to redistribute wealth. Waqf can help reduce these problems thereby reducing the financial burden on Governments.
• Waqf, when effectively administered, has the potential to reduce the financial burden on Governments by also providing social services such as hospitals and schools. Because of issues such as weak economic and political institutions (types of social infrastructure), there is inefficiency in providing social services in most Muslim countries. Therefore, Islamic Social Finance instruments such as Waqf is an ideal means of effectively meeting the social service needs in Muslim countries.
• Another reason why Muslims need Waqf is to provide intermediation for perpetual social savings (Shaikh, Ismail & Mohd Shafiai, 2017). Through waqf, surplus segments of the society intending to engage in philanthropic acts are linked with the deficit segments such as the poor and needy.
• Another reason why Muslims need the waqf system is to complement Zakah because Zakah cannot be collected to exceed the prescribed portion of wealth. Another way waqf complements Zakah is by having a wider array of use. The evidence is as follows:

“The alms are only for the Fuqara’ (the poor), and Al-Masakin (the needy) and those employed to collect (the funds), and to attract the hearts of those who have been inclined (towards Islam), and to free the captives; and for those in debt; and for Allah’s Cause, and for the wayfarer (a traveller who is cut off from everything); a duty imposed by Allah. And Allah is All-Knower, All-Wise.”

[Al-Quran 9:60]

Based on this Quranic verse, Zakah has only eight categories of people that qualify. However, waqf can be used for these categories of people and much more.

• Another reason why Muslims need the waqf system is to earn Allah’s pleasure by giving. Allah says in the holy Quran:

“By no means shall you attain righteousness unless you give of that which you love”

[Quran 3:92]

Having said all these, we end this article by calling for you to invest in your akhira (hereafter). You may read more about what we do at Finterra’s WAQFChain and invest in your akhira through this platform.

Reference

Shaikh, S. A., Ismail, A. G., & Mohd Shafiai, M. H. (2017). Application of waqf for social and development finance. ISRA International Journal of Islamic Finance, 9(1), 5–14. https://doi.org/10.1108/IJIF-07-2017-002

Why Do Muslims Need the Waqf System? was originally published in The Finterra Publication on Medium, where people are continuing the conversation by highlighting and responding to this story.

The United Nations (UN) Sustainable Development Goals (SDGs) consist of 17 interconnected goals which, according to the UN, were set up to “meet the urgent environmental, political and economic challenges facing our world.” This article highlights the similarities between the UN SDGs and the goals of waqf. It also explains how waqf can fulfil some of the SDGs.

Waqf is indeed related to the first SDG which is ‘No Poverty’. As at 2019, about 600 million people in the world live in extreme poverty (Brookings Institute, 2020). Majority of these people live in Muslim countries. With waqf, voluntary donations by Muslims which are perpetual can alleviate poverty when properly implemented. The world and indeed Muslims need to take action to end poverty because of the social ills that come with poverty.

Another SDG which is closely related to waqf is the second: ‘Zero Hunger’. This goal is closely related to the first goal. Waqf could help achieve this goal by providing funds for poor farmers in the agricultural sector to enhance food security. According to the UN, 821 million people in the world are undernourished as at 2017. Therefore, this goal is pertinent. An overhaul of the global food and agricultural system is urgently needed and waqf can help.

The third SDG which waqf can help fulfil is ‘Quality Education’. Waqf is not just restricted to providing endowments for religious education or mosques. Realizing this, Muslims can make charitable endowments for conventional education also thereby improving the quality of human capital. A more educated workforce will spend more and this will have a multiplier effect on the wealth of the society.

Finally, waqfs can help achieve the tenth SDG: ‘Reduced Inequalities’. With waqf, there is a redistribution of wealth and income from the ‘haves’ to the ‘haves-not’. This process also reduces the burden of redistributing wealth from the Government so that more resources are available for other societal needs.

We end this article by making a call for action by Muslims to engage in Waqf. More convenient ways of meeting the goals highlighted above have emerged. One of these is the emergence of online methods of making endowments. An example is the charity on blockchain platform known as Ensany. In collaboration with Finterra, this charity on blockchain offers traceability, reliability, transparency, enhanced security as well as immutability, compared to other online charity platforms.

Reference

Brookings Institute. (2020). Future Development: Rethinking Global Poverty Reduction in 2019. Retrieved February 12, 2020, from Brookings Institute Web site: https://www.brookings.edu/blog/future-development/2018/12/13/rethinking-global-poverty-reduction-in-2019/

Waqf in Relation to UN SDGs was originally published in The Finterra Publication on Medium, where people are continuing the conversation by highlighting and responding to this story.

The notion of waqf is not unique to Islam or Muslims alone. The concept of waqf has been adapted by the West also. By adaptation, we mean modification of waqf tenets to suit the needs and characteristics of the society in which it is adapted. The concept of waqf spreading to the West can be traced to the English Crusades (1095–1291) who brought it to the West after observing it in the Middle East in the 13th century. For this reason, waqf law has some similarities with the English trust law. One of the Crusaders who observed how waqf operated in Syria thereafter set up Merton College, Oxford University’s oldest college, based on his knowledge of charitable madrasahs as awqaf (plural of waqf). Similarly, Peterhouse College, Cambridge University’s oldest college, was set up based on the concept of Waqf. According to Prof Murat Çizakça, Ivy League universities in the USA were established based on the principle of waqf.

Another adaptation of the principle of waqf in the West was in the Knights of Templar, who visited the Middle East in the 12th century, establishing trusts that set up London’s first law schools — precursors to the Inns of Courts. In the present day, the Inns of Courts comprises of 4 law schools that call English lawyers to the bar. The trusts establishing London’s first law schools in the Middle Ages adapted the concept of law schools attached to mosques as waqfs. During this period, law was taught in England by clergymen.

In the present day, several waqf principles have been adapted by the West. Online waqf-based crowdfunding is one way the principle of waqf has been adapted by the West. Advancements in mobile and online payments in recent times have facilitated this phenomenon. One example of this is Ensany, an online crowdfunding website for charities related to Islam and Muslims. One of Ensany’s areas of crowdfunding is in cash waqf for various projects ranging from mosques to orphanages, schools and hospitals. Another example of waqf online is seen in Islamic Relief, a Non-Governmental Organization (NGO) based in the United Kingdom, has adapted a variant of cash waqf — waqf shares scheme. Waqf shares scheme is a modern-day innovative scheme in which organizations or individuals regardless of income level buy shares which are then converted to awqaf. Waqf shares are a form of movable waqf.

Some companies that offer platforms for contributing focus on a specific country or region, but Finterra’s presence is scattered across the globe with offices in Singapore, Malaysia, Hong Kong, India and United Arab Emirates, with plans to expand further into new markets.

The Adaptation of Waqf Principle by Western Countries was originally published in The Finterra Publication on Medium, where people are continuing the conversation by highlighting and responding to this story.