The Role of Islamic Social Finance in Mitigating Humanitarian Crises
A Multi-Range Strategy to Mitigate COVID-19 Impacts
Keywords:
humanitarian crises; COVID-19 impacts; Islamic social finance; Islamic social finance tools
Abstract
The economic shutdown resulting from the COVID-19 pandemic across countries has caused huge impacts on various industries which are cutting down production and jobs. This led to many socio-economic risks, such as high unemployment rates, low income rates, increasing risks of poverty and hunger. This study explores the validity of the proposition that the Islamic social finance have an effective role in mitigating the humanitarian crises risks. So the paper tries to provide a multi-range strategy for maximize the benefit from Islamic social financing tools such as zakat, sadaqah, and waqf in short, medium and long range, and choosing the well-suited tool in each range of the strategy, in order to effective handling the social impacts of COVID-19. This paper reviews the conceptual definitions of Islamic social finance, and its various instruments. The study relied primarily on sources gathered from ongoing researches, news articles, reports, and information recorded by verified online sources of information. The results indicate that the multi-range strategy of Islamic social finance providing an innovative way which can helps governments and policy makers for manage the crisis during and after the COVID-19 pandemic.
Keywords; humanitarian crises; COVID-19 impacts; Islamic social finance; Islamic social finance tools
References
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[38] Yusoff, M. B., "An Analysis of Zakat Expenditure and Real Output: Theory and Evidence", International Journal of Economics, Management and Accountin,2010, vol. 18(2), pp139.
[39] Dogarawa, A. B., "Poverty Alleviaton through Zakah and Waqf Institutions: A Case for the Muslim Ummah in Ghana", 2009.
[40] Singh, Ranjit Ajit., "Harnessing Waqf into a Bankable Social Financing and Investment Asset Class", In 5th SC-OCIS Roundtable on Islamic Finance, Kuala Lumpur, 2014.
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[2] World health organization, "WHO Coronavirus Disease (COVID-19) Dashboard", Retrieved in July 2020, available at; https://covid19.who.int/.
[3] Nick Turse, "Exceptionally Dire, Secondary Impacts of Covid-19 Could Increase Global Poverty and Hunger", May 3 2020, Retrieved in July 2020, Available at; https://theintercept.com/2020/05/03/exceptionally-dire-secondary-impacts-of-covid-19-could-increase-global-poverty-and-hunger/
[4] Jacob Curtzer, "The Impact of COVID-19 on Humanitarian Crises", center for strategic and international studies, 2019; Retrieved in July 2020, available at: https://www.csis.org/analysis/impact-covid-19-humanitarian-crises.
[5] Freedman, C., Kumhof, M., Laxton, D., Muir, D., & Mursula, S. (). "Global effects of fiscal stimulus during the crisis. Journal of monetary economics", 2010,Vol. 57(5), pp.506-526.
[6] Cogan, J. F., & Taylor, J. B. "What the government purchases multiplier actually multiplied in the 2009 stimulus package", National Bureau of Economic Research, (2010), (No. w16505).
[7] Islamic Social Finance, "Responsibility Five Of The Agenda for Humanity", Special Session Summary, Core world humanitarian summit, Istanbul, 23-24 may, 2016.
[8] Islamic Social Finance Report, "Islamic Research and Training Institute, Islamic Development Bank, Jeddah, 2015.
[9] Kamar, A, Norat M, Pinon M, Prasad A, Towe C, Zeidaine, Z & IMF Staff Team," Islamic Finance: opportunities, Challenges and policy Options", IMF Staff. Discussion, 2015, Note :8-11& 26.
[10] Tabash I.M., and Dhankar R, "Islamic Finance and Economic Growth: An Empirical Evidence from UAE", Journal of Emerging issues in Economic, Finance and Banking, 2014, vol. 3(2), pp. 1069- 1082.
[11] Falex Dictionary, "Islamic Finance", 2012, Retrieved in July 2020, Available at: http://financialdictionary.Thefreedictionary/Islamic+finance
[12] Islamic Research and Training Institute, "Islamic Social Finance Report", Islamic Development Bank, Jeddah, 2014.
[13] Qardawi, Yusuf Al, "Fiqh Al Zakah", Islamic Book Trust, 2013.
[14] Islamic Relief worldwide, "Sadaqah, Retrieved in July 2020", available at:https://www.islamic-relief.org/category/strategic-business-units/islamic-social-finance-strategic-business-units/sadaqah/
[15] Ibrahim Mohammed Lawal, Jiddah. M.A Ajayi, "The role of Islamic social finance towards alleviating the humanitarian crisis in North-East Nigeria", Jurnal Perspektif Pembiayaan dan Pembangunan Daerah, 2019, Vol. 6(5), pp.. 2355-8520.
[16] Social financing: "Ashariah compliant model, Soyan financial consultancy", June, 2017.
[17] Kahf, "MFinancing the Development of Awqaf Property" , Working Paper for the Seminar on Development of Awqaf by IRTI, Malaysia. Kuala Lumpur, 1998.
[18] International Shari’ah Research Academy for Islamic Finance (ISRA) and Securities Commission Malaysia, "Islamic Capital Markets: Principles and Practices", 2015.
[19] Islamic Relief worldwide, "Takaful (co-operative insurance)", Retrieved in July 2020, available at, https://www.islamic-relief.org/category/strategic-business-units/islamic-social-finance-strategic-business-units/takaful-cooperative-insurance/
[20] Guerrieri, V., Lorenzoni, G., Straub, L., & Werning, I., "Macroeconomic Implications of COVID-19: Can Negative Supply Shocks Cause Demand Shortages?", National Bureau of Economic Research, 2020, (No. w26918).
[21] Extremely Poor People Will Go Hungry As Covid-19 Response Measures Hit, Concern worldwide, Retrieved in July 2020, available at: https://reliefweb.int/sites/reliefweb.int/files/resources/Concern%20-%20Covid.Hunger.Extreme%20Poor.pdf.
[22] United Nation, Putting the Un Framework for Socio-Economic Response to Covid-19 into Action: Insights, Brief#2, June, 2020.
[23] ILO Monitor:, "COVID-19 and the world of work", Third edition Updated estimates and analysis, 29 April 2020
[24] Impact of the COVID,19 pandemic on education. Available at; https://en.wikipedia.org/wiki/Impact_of_the_COVID
[25] UNESCO, "COVID-19 Educational Disruption and Response", UNESCO. 2020-03-04. Retrieved June 2020.
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[28] Zillur Rahaman, "Role of Zakat to mitigate Covid-19-induced hardship", Retrieved in July 2020, available at, http://www.theindependentbd.com/post/246416
[29] Muhamad Abduh, "The Role of Islamic Social Finance in Achieving Sdg Number 2: End Hunger, Achieve Food Security and Improved Nutrition and Promote Sustainable Agriculture", Journal of Islamic Thought and civilization, special issue; Islamic Banking and Finance, 2019.
[30] Ali Chamani Al Anshory, "The Role of Zakat Institution in Preventing Covid-19", policy brief- BAZAS, 2020.
[31] Greget Kalla Buana, "Weighing in on the Role of Sukuk in Combating COVID-19",2020, Retrieved in July 2020, available at, https://worldfinancialreview.com/weighing-in-on-the-role-of-sukuk-in-combating-covid-
[32] Aamir A Rehman, "Islamic finance takes on COVID-19, United Nations Development Programme", Posted on April 23, 2020. Retrieved in July 2020, available at; https://www.undp.org/content/undp/en/home/blog/2020/islamic-finance-takes-on-covid-19.html
[33] Islamic finance body sets up fund on coronavirus impact, Retrieved in July 2020, available at; https://www.aa.com.tr/en/economy/islamic-finance-body-sets-up-fund-on-coronavirus-impact/1769145.
[34] Paolo Pietro Biancone and Maha Radwan, "Social Finance and Financing Social Enterprises: An Islamic Finance Prospective", Special Issue Islamic and Social Finance, European Journal of Islamic Finance, 2019.
[35] WIEF Foundation, "Islamic social finance and humanitarian action", Retrieved in July 2020, available at; https://infocus.wief.org/islamic-social-finance-and-humanitarian-action/
[36] Global Sadaqah Beta, "Crowdfunding: The Future of Islamic Social Finance?", 2018, Retrieved in July 2020, Available at: https://www.globalsadaqah.com/blog/crowdfunding-future-islamic-social-finance/)
[37] Aliyu, D.H., Muhammad, L,M., Usman, B.S., "The Role of Islamic Social Financing in Empowering Youth and Women in Sokoto State", Journal of Islamic Monetary Economics and Finance, 2018, vol. 3. Pp.141-152.
[38] Yusoff, M. B., "An Analysis of Zakat Expenditure and Real Output: Theory and Evidence", International Journal of Economics, Management and Accountin,2010, vol. 18(2), pp139.
[39] Dogarawa, A. B., "Poverty Alleviaton through Zakah and Waqf Institutions: A Case for the Muslim Ummah in Ghana", 2009.
[40] Singh, Ranjit Ajit., "Harnessing Waqf into a Bankable Social Financing and Investment Asset Class", In 5th SC-OCIS Roundtable on Islamic Finance, Kuala Lumpur, 2014.
[41] P. P. Biancone and M. Radwan, “Social Finance And Unconventional Financing Alternatives: An Overview,” Eur. J. Islam. Finance, no. 10, 2018.
[42] Biancone, P. P., Secinaro, S., & Kamal, M., Crowdfunding and Fintech: business model sharia compliant. European Journal of Islamic Finance, 2019, no. (12).
Published
2020-12-31
How to Cite
Hamed, M. M. (2020). The Role of Islamic Social Finance in Mitigating Humanitarian Crises: A Multi-Range Strategy to Mitigate COVID-19 Impacts. European Journal of Islamic Finance, (16). https://doi.org/10.13135/2421-2172/4937
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