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Islamic Finance | |
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Friday, May 29, 2020 / 1:00 PM / Bukola Akinyele for WebTV / Header Image Credit: TAJ Bank
The Waqf Institution has been described as a critical
social platform that could support the growth of the Nigerian economy, at a
time it was coping, alongside other nations, with the COVID-19 Pandemic.
The comment was made by the Managing Director of TAJ Bank (A Non-Interest
Finance Bank), Mr. Norfadalizan
AbdulRahmon, who featured on WebTV's Islamic Finance Weekly programme.
He believed that the period offered an opportunity to
leverage social welfare platforms like the Islamic Waqf, which could mobilize
large support and participation from citizens.
According to him "We must start considering
and addressing debts especially the interest-bearing ones which endangers the
physical sustainability of the nation and could lead to a debt glut. At
the individual level, we should start looking at how to create wealth and
reserves that could absorb shocks like COVID-19 in the future".
Speaking within the context of the Post-Ramadan
season, he identified personal finance options that include; funding to
meet household needs for appliances, food service, subscription for data,
Airtime and so on.
AbdulRahmon noted that there were microfinance options
to sustain business expenditure, amongst other financing needs.
Taking an overview of the Central Bank of Nigeria
(CBN) interventions, the TAJ Bank MD cited Islamic banking as an example of a
financial market that grants moratorium to deserving borrowers. He said that in
Oman the government allows a 3-month waiver for SMEs, the same applies in
Bahrain where similar principles apply for SME funding.
The banker advocated for broader investments in
productive ventures that would in the near term be of benefit to society and
would cushion the shocks of the COVID-19 pandemic.
He noted that areas like food and the healthcare
supply chain could be addressed, he emphasized the importance of wealth
creation through an improved savings culture which he considered important to
absorb economic shocks.
He was of the view that investing in the real sector,
moderation in consumption, avoiding unproductive debts, developing habits of
charity should be at the core of the behavioural attitude of Muslims going
forward.
"There is a need to support the poor such as giving
Sadaqah and paying Zakat which is an Islamic Tax. We should also
establish endowments like Waqf to perpetually narrow economic inequality and
reduce poverty while leveraging on online platforms and the use of social media
to raise awareness" he said.
Giving his views on the gradual reopening of the
economy, he called on organizations to adopt and sustain physical distancing
measures while avoiding overcrowded workspaces.
The Global Waqf value as of 2019 was estimated at
$27bn, while the projected size of Islamic finance could reach $3trn in 2020.
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