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COVID-19: How Islamic Finance Supports The Economy Through Waqf Crowd Funding - Dr. Aliyu Dahiru

Islamic Finance	2104 VIEWS
Islamic Finance
2104 VIEWS

Friday, May 01 , 2020 / 12:56 PM / Bukola Akinyele for WebTV / Header Image Credit: WebTV

Islamic Finance through Waqf Crowd Funding could support Nigeria's efforts at mitigating the adverse impact of the novel coronavirus on the economy.

Dr. Aliyu Dahiru Muhammad, the Deputy Director, Training and Linkages, International Institute of Islamic Banking and Finance, Bayero University Kano, BUK noted this in an interview with WebTV's Islamic Finance Weekly.

According to Muhammad, Waqf which is a form of endowment in Islamic Finance, is an avenue to mobilize wealthy Muslims and even less wealthy individuals to contribute funds to address a social cause.

The type of cause range from Education, Health, Environment to even Charity and comes at a critical time when the globe is experiencing the adverse impact of COVID -19.

Experiencing revenue challenges and seeking funding from international financial institutions like the IMF, Dr Muhammad was of the view that Nigeria could benefit from instruments like a Waqf fund, to support the healthcare and other segments of the socio-economic environment.

Waqf Crowdfunding platform, according to him, could generate funds for the Nigerian economy, encouraging a huge population of over 100m that could see both the rich and poor donate as little as N100.

From the funds raised from Waqf funding, the Islamic Finance expert believed massive healthcare intervention could be achieved in Nigeria.

He called on economic policy makers to explore leveraging the opportunities in the non-interest finance market, citing an interest-driven global market as part of the reasons for the economic slowdown experienced by various nations.

The Islamic Banking and Finance scholar acknowledged the current steps by the Federal Government, to revise the 2020 budget assumptions to face the realities of the current plunge in International Crude Oil price.

Dr Muhammad also noted that the Islamic Development Bank, IsDB (IsDB) has set aside a $2.3bn response facility for the Organization of Islamic Countries (OIC) which Nigeria as a member can also access for funding.

He stressed the need for the Federal Government to explore how to integrate Islamic Finance into its development agenda, considering the non-interest provisions.

According to the finance teacher, Waqf provides opportunities different from Sukuk which is normally used to generate long term financing projects.

Looking at the Nigerian economy he lauded the efforts of Jaiz Bank a non-interest bank which has set aside N4bn to support micro, small and medium enterprises (MSMEs) within 8 months which is first of its kind in Islamic finance markets.

The current global size of Waqf in terms of valuation is currently put at over $100bn and provides an avenue to boost sustainable financing.

Speaking to the season of the Ramadan fast for Muslims across the globe, he listed the objectives of shariah which include;

Protection of life which is very important to protect people's life.
To Protect their Religion
To protect their Alkai which means their reasoning, intellect which shariah prohibit taking alcohol, or taking any drugs that will makes someone loses his/her intellect and also advocate for education so that it will enhance the mind.
Shariah also protects the Nasal which means the lineage, marital relationships to ensure that people come through the legitimate processes of marriage.
Finally, shariah comes to protect the wealth of Almal

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