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Islamic Finance
Ensuring the future of Islamic finance is collective, not corporate

Islamic finance was never meant to be an institutional product reserved for the elite. When Islam introduced its financial ethics more than 1,400 years ago, the goal wasn’t corporate compliance but justice.

From Zakat (obligatory almsgiving) to Waqf (endowment for public benefit) to Shura (consultative decision-making), early Islamic finance systems were designed to empower individuals, protect communities, and keep wealth in circulation.

These weren’t abstract ideas; they were real, operational systems that funded schools, fed families, and supported the vulnerable — all without profit as the endgame.

Take the Bayt al-Mal, a public treasury established during the caliphate of Umar ibn al-Khattab (RA), which ensured basic needs were met. It distributed wealth to the poor, paid stipends to widows and orphans, and reflected the principle of structured social finance.

Meanwhile, Waqf allowed Muslims to endow property and wealth for a enduring public cause, from building hospitals to digging wells. These examples weren’t exceptions; they were the norm.

The Qur’an reminds us: “So that wealth does not circulate only among the rich from among you.” (Surah Al-Hashr, 59:7).

The Prophet Muhammad ﷺ said, “The believers are like one body; if one part hurts, the whole body feels the pain.” (Sahih Muslim, 2586).

These aren’t just quotes, they are marching orders.

When growth replaces purpose
As Islamic finance scaled up, it started looking more like the systems it was meant to disrupt.

Shariah-compliant labels became more about marketing than mission. Many financial products began to mimic conventional models — centralised, opaque, and profit-first. Somewhere along the way, users stopped being community members and started being “policyholders.” 

Mutual aid became legal paperwork. And spiritual intention got lost in the pursuit of market share.

This isn’t to dismiss the efforts of Islamic financial institutions. They played a role in legitimizing Islamic finance globally. But scale came with tradeoffs. In trying to compete with conventional systems, many forgot why Islamic finance existed in the first place.

The price of playing the corporate game
This shift has led to three major problems. First, many lower-income Muslims, migrants, and informal workers find Islamic finance inaccessible — it's too complex, too expensive, and feels unfamiliar.

Second, people begin to lose trust when Shariah-compliant products feel indistinguishable from conventional ones.

And third, users are left disempowered, treated as passive consumers with no say in how their money is used. For example, in Takaful (Islamic cooperative protection), contributors face layers of bureaucracy and lack transparency, while profits often benefit shareholders, not the community.

Tools to rebuild and the values to guide them
The good news? We have the tools to change course and the values to lead the way.

Blockchain and decentralized autonomous organizations (DAOs) allow us to rebuild transparent, community-governed systems where people participate, vote, and benefit. 

We’re not talking about theory here. Platforms like TheLifeDAO are already using these tools to help Muslims and like-minded individuals around the world pool funds to cover end-of-life costs, not through insurance, but through real, peer-powered protection.

DAOs bring back the spirit of Ta’awun (mutual cooperation) with modern infrastructure. No shareholders. No middlemen. Just people looking after one another, with full visibility on how their money is used and where it's going.

Reclaiming the core of Islamic finance
This isn’t a trend, it’s a reset. Community-based Islamic finance brings transparency back into how decisions are made. It gives people a voice in systems that affect their future. And it revives the real meaning of halal finance, not just in contracts, but in purpose.

It’s about building systems that feel spiritually aligned, not just technically compliant. 

The Qur’an says, “Indeed, Allah commands justice and good conduct…” (Surah An-Nahl, 16:90).

Justice doesn’t trickle down from the top. It starts with putting the ummah back at the center.

Where do you start?
You don’t need to be a scholar or fintech expert to be part of this shift. It starts with asking better questions.

Does this product actually help the people it claims to serve? Is it accessible and transparent? Do I have a voice in how it works? And if the answer is no, maybe it’s time to look elsewhere.

Instead of relying on systems built for profit, consider those designed around people.

Support platforms that prioritize shared governance, spiritual integrity, and collective benefit. Whether it’s a local cooperative or a global DAO, choosing values-aligned alternatives is more than just a financial move, it’s a stand for justice.

Sharene Lee is the chief operating office & co-founder of Takadao

Islamic Lifestyle
How Manzil aims to reimagine homeownership for Muslim families

We speak with Dr. Mohamad Sawwaf, co-founder & CEO of Canadian Islamic fintech company, Manzil, on its first faith-driven residential project, which aims to offer a modern yet inclusive ethical housing structure. 

What is Manzil’s broader goal with the launch of its faith-driven residential project?
Manzil’s broader vision is to pioneer Canada’s first purpose-built Muslim community that seamlessly integrates modern urban living with Islamic values and lifestyle needs.

This initiative - known as Manzil Communities - aims to create a vibrant, inclusive, and family-oriented environment where faith, financial ethics, and community infrastructure coexist.

It addresses the growing demand among Muslim families for housing that respects their spiritual, cultural, and financial principles, while also fostering civic engagement and intergenerational prosperity.

Ultimately, our goal is to set a replicable blueprint for inclusive urban development rooted in ethical finance and social purpose.

⁠When will the project be launched?
The first Manzil Communities project is expected to break ground in early 2026, with pre-sales and marketing activities beginning in late 2025.

We are currently in advanced discussions with municipal partners and developers to finalize zoning, design, and financing frameworks.

                         Dr. Mohamad Sawwaf (Image: Supplied)

Full public details, including location, masterplan features, and eligibility criteria, will be announced later this year.

⁠How will Manzil facilitate Shariah-compliant financing for purchasers?
Manzil will offer home financing solutions through its established and Shariah-compliant co-ownership model.

This model is structured without interest (riba) and avoids prohibited elements such as gharar and speculation.

Under this arrangement, Manzil and the customer jointly acquire the property, with the customer gradually purchasing Manzil’s share over time while paying a fair market profit on the portion not yet owned.

The structure is certified by our in-house Shariah board, ensuring compliance with Islamic financial principles and full transparency for buyers.

⁠How has the feedback been so far?
The response has been overwhelmingly positive. Since our initial announcement, we’ve received expressions of interest from over a thousand families across Canada and beyond.

Community leaders, clerics, urban planners, and Islamic organizations have voiced strong support for a development that prioritizes spiritual well-being, halal financing, and culturally informed design.

Many see this as a landmark opportunity to address the housing needs of Muslim communities in a dignified and faith-conscious manner.

⁠How can other Western societies replicate the model?
The key to replicating this model lies in collaboration, customization, and compliance. Faith-driven housing must be co-developed with local communities, supported by financial institutions that understand Islamic ethics, and integrated with municipal planning frameworks.

Western societies can adopt a similar model by supporting alternative financing structures, accommodating religious amenities in zoning bylaws (e.g., prayer spaces, gender-sensitive facilities), and engaging culturally diverse populations in their housing strategies.

Manzil is open to knowledge-sharing and partnerships with organizations globally that are committed to advancing ethical housing and inclusive community development.
 

Halal Industry
Halal roundup: Malaysia’s halal certification goes digital

Here's a roundup of key developments across the halal industry ecosystem during the month of May

 

Editor's note: Digital is the new normal, with companies and entire industries thrive on the efficacy and ease of digitalization.

 

Malaysia is all keen to partake in the technological revolution, which has prompted the country to process all halal certification applications digitally.

 

Meanwhile, the UAE has launched a new strategy to double its Islamic bank assets in the next six years. 

 

Operational Developments


 

 

Malaysia

Malaysia’s halal certification becomes fully digital

All applications for Malaysian Halal Certification will be processed electronically starting May 5, as part of constant efforts to meet industry demand.

 

Dr Sirajuddin Suhaimee, Director General of the Department of Islamic Development Malaysia (Jakim), announced that successful applicants will receive digital certificates through the MYeHALAL platform.

 

This move, part of a broader public sector digitalization drive, aims to streamline services and reduce delays. (The Edge)

 

Regulatory


 

Image Courtesy: South China Morning Post

 

Hong Kong

Hong Kong creates new certification to beckon Muslims 

Hong Kong is creating a halal-friendly environment with the introduction of a new certificationThe Hong Kong Federation of Hong Kong Industries and a leading Muslim group signed a memorandum of understanding to focus on halal-sanctioned products and services.

 

This agreement with the Incorporated Trustees of the Islamic Community Fund of Hong Kong will lead to the establishment of a halal-related quality certification (Q mark).

 

Products and services with the Q mark will be certified by the fund. (SCMP)

 

 

Trade Developments


 

Image Courtesy: Government of Dubai - Media Office

 

Malaysia

Johor eyes halal goldmine with 2030 plan to attract global investors, create high-income jobs

Johor is set to launch its Halal Advancement Plan 2030 this year, aiming to become the first Malaysian state with a comprehensive halal economic development framework.

 

The plan focuses on enhancing the halal ecosystem by creating high-income jobs, producing globally competitive halal products, and supporting local entrepreneurs.

 

Key initiatives include registering 500 halal companies annually, accelerating certification, and providing incentives to expand market reach. (Malay Mail)

 

Malaysia

Penang becomes first state to establish council to strengthen halal industry

Penang has become the first Malaysian state to establish a development council, aimed at strengthening the halal industry.

 

Chief Minister Chow Kon Yeow emphasized that this move reflects the state's commitment to becoming a hub for the production, processing, and export of halal products to ASEAN and global markets.

 

Penang is also the only state conducting medical device audits under all nine Malaysian Halal Certification Schemes. (Sinar Daily)

 

UAE

UAE approves strategy for Islamic finance, halal industry

The UAE Cabinet has approved a national strategy for Islamic finance and the halal industry. 

 

The strategy focuses on developing the Islamic financial industry, leading global Islamic finance activities, and increasing the export of halal products worldwide. (Sinar Daily)

 

Indonesia / Vietnam

Indonesia eyes more partnership with Vietnam in halal-certified production, cosmetics

Indonesia is eager to collaborate with Vietnam in the halal industry, sharing its expertise in halal standards across sectors such as food processing, cosmetics, tourism, and halal financial services.

 

This was shared by Agustaviano Sofjan, Indonesia's consul general in Ho Chi Minh City, at a workshop on international cooperation in the halal industry.

 

He emphasized that the halal industry serves both the global Muslim community and international consumers seeking quality and safety, and that Indonesia is ready to support Vietnam in these areas. (Halal Focus)

 

 

UPCOMING EVENTS :

Opinion
A moral foundation for business in Islam

“God is ever watchful.”

“He knows not only your actions, but your intentions.”

“Nothing is hidden from his sight.”

These were among the first truths many of us absorbed as children, not from textbooks, but from the practiced faith of our elders. Long before formal study, we were reminded of dictums such as no deed is insignificant, no motive escapes notice.

In that remembrance, a moral architecture was built - quiet, steady, enduring: the architecture of accountability.

The modern business crisis: A vacuum of moral weight
In today’s business world, accountability is often reduced to technical compliance or financial oversight. The animating spirit - why we act, to whom we answer, and what our actions mean in a larger moral frame - has been hollowed out.

Many entrepreneurs begin with market logic: What sells? What scales? At best, the intent is to solve a problem. At worst, to only make a profit.

But profit without moral grounding is like motion without direction. A business that forgets its obligations - whether to people, the environment, or a higher purpose - risks devolving into mere manipulation. When this happens, the most vital component of enterprise - trust - begins to corrode. 

                        Sajjad Chowdhry (Image: supplied)

A Qur’anic conception of accountability
The Islamic worldview holds that every action, whether visible or concealed, is subject to moral accountability.

The Qur’an reminds us:

“Every soul is held in pledge for what it has earned.” (74:38)

This applies no less to commercial activity than to private worship. In Islamic law, the human being is referred to as a mukallaf - a morally responsible agent. It is not a titular position but a state of being. It demands consciousness in every role we serve, as founders, investors, managers, or workers.

Every contract signed, every supply chain chosen, every pitch delivered - these are not neutral acts. They are moral events, echoing in - and recorded beyond - time.

It was said that ʿUmar ibn al-Khaṭṭāb (r), the second caliph, once remarked:

“If a lost sheep under my rule were to perish on the banks of the Euphrates, I fear I would be questioned about it by Allah.”

These were the words of a man who knew too well the heft of responsibility that he assumed.

Leadership, he understood, does not end at the edge of visibility. Responsibility includes second-order (i.e. downstream) consequences, even the ones no one sees but God.

So we must ask ourselves: What damage or distress, however remote or unintended, are entailed by our operations? If we outsource harm, does it cease to be ours?

Three dimensions of moral accountability

Islamic tradition speaks of accountability in three intertwined dimensions:

1.    To God (ḥuqūq Allāh) - Are our dealings truthful, fair, and in alignment with divine limits?

2.    To Creation (ḥuqūq al-ʿibād) - Are we honoring the rights of those who trust us - kith and kin, employees, customers, suppliers, neighbors, and the environment?

3.    To the Self (nafs) - Are we preserving our own moral and spiritual integrity in the pursuit of our goals?

Without accountability across these dimensions, the soul of commerce disintegrates. What remains is transaction without meaning. A well-worn marketing pitch sums it most aptly: “Look them in the eye, tell them a lie, and watch them buy.”

Such a mindset reduces business to performance. But Islam calls us to something far greater: to sincerity, to stewardship, to truth.

The Mukallaf entrepreneur: Between power and responsibility
A business leader in Islam is not simply a strategist or an executor. He or she is a shepherd, entrusted with a flock - just as the Prophet ﷺ taught:

“Each of you is a shepherd, and each of you is accountable for his flock.” (Bukhārī and Muslim).

This means we must build institutions that remember, not just those that scale:

●    Introduce ethical audits that examine moral impact, not just compliance.
●    Develop decision-making cultures grounded in conscience, not just calculation.
●    Conduct impact assessments that measure spiritual, human, and ecological outcomes - not just profit margins.

Rebuilding the moral infrastructure of enterprise
In earlier Islamic civilizations, business was embedded in a moral ecosystem: families, markets, guilds, and scholars all played a role in maintaining a collective assessment of right and wrong.

Today, these layers have thinned. Many of us operate in ethical solitude, surrounded by noise but starved of guidance.

All the more reason, then, that before we build a product, a brand, or a market, we build a sense of moral orientation. We must ask: “Have we grounded our business in accountability?”

Conclusion: Commerce as a sacred trust
Islam does not oppose commerce. It dignifies it, but when it is tied to truth, trust, and transcendence.

True success is not found in valuations or exits, but in what our work says about who we are and who we serve.

To build with accountability is to build with ihsān - excellence before God and service to creation. Without accountability, rights are vague, duties are heavy, and trust is thin.

With accountability, commerce becomes not just halal, but sacred.

Sajjad Chowdhry is an entrepreneur and C-level executive with over two decades of global experience across venture building, strategy, investment, and strategic finance. A Columbia and Hartford Seminary graduate, he is also a co-founder of DinarStandard

Halal Industry
Penang sets up Malaysia’s first state-level halal industry council

Penang has become the first Malaysian state to establish a dedicated council to coordinate and drive the growth of its halal industry, according to Malaysia’s state news agency Bernama.

The Penang Halal Industry Development Council was launched on May 12 and aims to enhance the state’s role as a regional hub for halal production, processing, and exports to ASEAN and global markets. The council’s formation was approved by the State Executive Council on January 22, 2025.

Penang currently has 870 active companies certified under the Malaysian Halal Certification Scheme (SPHM), covering sectors such as food and beverages, pharmaceuticals, cosmetics, logistics, slaughterhouses, and medical devices. The state is also the only one in Malaysia conducting medical device audits aligned with all nine national halal certification schemes.

The new council will serve as a platform to coordinate inter-agency efforts, promote SME capacity building, and support international halal trade and investment initiatives. It is chaired by Deputy Chief Minister I, Datuk Dr Mohamad Abdul Hamid.

A memorandum of understanding was signed between PHI and the Penang Regional Development Authority (Perda) to explore collaboration on entrepreneur development through halal certification.

Bernama reports that the council is expected to play a central role in strengthening Penang’s competitiveness in the halal sector and supporting Bumiputera entrepreneurs in accessing global halal markets.
 


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