There is a significant gap between the estimated potential of zakat proceeds and its collection through formal institutions (Shutterstock).

Islamic Finance

Lack of good practice solutions hinders development of Islamic social finance


The potential of zakat is not being maximised in the fight against poverty.

 

Tokyo: The lack of a common international Islamic financial regulatory system is hindering the development of Islamic social finance instruments, causing a dearth of good practice solutions that could effectively fight poverty, say experts.

In the February 2021 issue of the International Sharia Research Academy (ISRA) International Journal of Islamic Finance, Abdulsalam Ahmed Sawmar and his co-authors say the key element of Muslim charity, zakat (obligatory charity), has historically “been an integral part of the Islamic economic system because of its sizable impact in achieving social harmony and preserving decent living standard for the needy segments of Muslim communities”.

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tags:

Charity
Islamic finance masterplan
Zakat
Philanthropy
Islamic social finance
Donation
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Kathryn Wortley