Rising together: Halal economy’s role in empowering the underserved

The halal economy, a thriving sector rooted in Islamic values, is increasingly recognized for its potential to uplift marginalized communities by promoting economic empowerment, social inclusion, and ethical practices.

From halal food production to Islamic finance solutions, this dynamic economy creates opportunities that benefit not only Muslim populations but also broader communities seeking ethical alternatives to conventional business models.

Halal economy at a glance
The halal economy has grown significantly, expanding from $1.62 trillion in 2012 to $2.29 trillion in 2023 - about the size of Japan and Germany's combined economies.

Halal food contributed $52.6 billion in 2023, rivaling the global organic food market. Modest fashion grew from $224 billion to $318 billion, surpassing the global luxury goods market, while halal cosmetics tripled in size from $26 billion to $84 billion, nearing the global natural beauty sector.

Halal tourism also saw growth, with halal-certified restaurants in Hong Kong increasing from 63 to 142. In finance, the Islamic finance sector accounts for 81% of assets in top countries like Saudi Arabia and Malaysia, comparable to the world’s largest financial institutions. These statistics highlight the halal economy's role in driving sustainable growth and creating opportunities for marginalized communities.

Halal housing solutions
Affordable housing remains a critical issue for many marginalized communities, particularly in urban areas.

In Canada, Manzil, an organization focused on providing halal-compliant financial solutions, has been at the forefront of offering interest-free home financing options to Muslims, making homeownership more accessible for underserved populations. Through its innovative approach to Shariah-compliant home financing, Manzil helps remove financial barriers for marginalized individuals and families, promoting financial independence and stability.

The growth of halal housing solutions is an example of how the halal economy responds to the specific needs of marginalized groups, ensuring they can lead dignified lives without being excluded from mainstream economic activities. In this way, the halal economy fosters social and economic inclusion, promoting justice and fairness for communities that have traditionally faced systemic barriers.

Financial inclusion and Sadaqah
One of the key tenets of Islamic finance is sadaqah, the voluntary act of charitable giving aimed at redistributing wealth to those in need. Unlike Zakat, which is mandatory, sadaqah is highly encouraged as an ongoing practice of compassion and generosity. A well-known hadith states,

“Sadaqah does not decrease wealth” (Sahih Muslim 2588), emphasizing the spiritual and social rewards of giving. This principle inspires collective efforts to uplift marginalized communities, demonstrating the profound impact of shared responsibility and mutual care.

An example from the halal economy that embodies these values through its Shariah-compliant takaful alternative is The LifeDAO (TLD).

TLD is grounded in the concept of tabarru (voluntary contributions), with members contributing to a communal fund. If a member passes away, their family receives a charitable gift from the group. By pooling resources and redistributing surpluses, TLD showcases the power of collective action to provide financial security while upholding ethical principles.

Through initiatives like TLD, the halal economy exemplifies how the principles of sadaqah and mutual care can drive transformative change, empowering people to build more inclusive, equitable systems rooted in compassion and shared purpose.

Financial inclusion through ethical platforms
The halal economy also plays a crucial role in financial inclusion, particularly through innovative platforms that offer ethical finance options for underserved communities.

Fasset, a platform focused on creating blockchain-based solutions for sustainable infrastructure investment, partners with local communities to help them access capital for socially impactful projects.

Ethis, another company driving financial inclusion, focuses on real estate crowdfunding with a focus on ethical and Shariah-compliant investments, providing opportunities for individuals in marginalized communities to access financing for housing, education, and entrepreneurship.

These platforms, much like TLD, are leveraging technology to provide ethical, transparent financial services that empower marginalized communities. By removing traditional barriers to entry, these platforms ensure that individuals who have been traditionally excluded from financial services can gain access to the resources they need to thrive.

Moving ahead

From zakat redistribution to ethical business models, the halal sector is helping to create a more just and inclusive world. However, despite its successes, it continues to face challenges such as misconceptions about halal products and practices, as well as logistical barriers that limit access to halal goods in underserved regions. These obstacles can be addressed, with increasing awareness and demand, particularly for products that are sustainable, ethical, and inclusive. 

Sharene Lee is chief operating officer and Ameerah Langer is brand & communications head at Takadao