The Islamic Social Finance Center: A tangible outcome from Islamic finance training

To meet the growing social and economic needs of Muslims in the Philippines, especially on their traditional turf in Mindanao, a newly formed Islamic Social Finance Center (ISFC) was launched on the 14th July 2018 in the Philippines. In unveiling the programs of the ISFC, Amanoding D Esmail, the center’s founder, said before an audience of Islamic finance experts, educators and entrepreneurs, that the new outfit is quite different from the run-of-the-mill agencies operating in the Muslim areas in the Philippines today in that the ISFC embraces best practices in Islamic social finance found in Malaysia, Indonesia and Singapore. Essentially, the ISFC will be managing the inflow and outflow of such social financing mechanisms as Zakat, Waqf and Sadaqah. Among its features is leveraging the ubiquity of mobile phones to allow any individual to make his or her contribution, no matter how modest. For large sums, contributions and donations through Paypal and credit cards can be made through its website.

Amanoding added that the potential of Islamic social funds remains unrealized as actual Zakat and returns of Waqf are not fully utilized in the Philippines. Most places in the region do not have an Islamic microfinance industry, contributing to the diminution and blunting of the optimal potential of Islamic social finance while poverty remains widespread. A sustained flow of social funds demands high degrees of social acceptance and credibility, which in turn, are influenced by levels of integrity, transparency and professionalism in the management of these funds.

A professionally managed Zakat-financed microfinance program could potentially serve a much larger population of the poor, thus the creation of the ISFC. Since the ISFC will operate as a unit of the Aba Al-Khail Computer Foundation, it will be offering short-term courses related to its activities and Islamic finance in general. The creation of the ISFC could not have come at a better time in the wake of the Marawi siege which left the lives of hundreds of thousands of Muslims devastated. Some Muslim observers in the Philippines noted that the potential of Islamic social finance in propping up the livelihood of the internally displaced persons is enormous, yet so far, it has been observed that there is no coordination mechanism or an independent and autonomous body to help channel funds effectively for humanitarian action.

Speaking at the launching ceremony, Dr Syed Musa Alhabsi, the dean of the Institute of Islamic Banking and Finance at the International Islamic University Malaysia, welcomed this development as a “systematic approach to the management of social funds, and a departure from the hit-and-miss ad hoc organizations that had been previously set up for the purpose”.

Others who witnessed the launch included Dr Habib W Macaayong, the president of the Mindanao State University System; Dr Sharifah Khadijah Syed Agil, a senior lecturer of the International Professional Accounting Centre for Professional Accounting Education at University Teknologi Mara; Razi Pahlavi, the managing director of Amanie Holdings and myself. The highlight of the event was the swearing-in of its nine-member Council of Directors administered by Dr Habib.

Dr Kamola Bayram is the project director at the International Council of Islamic Finance Educators. She can be contacted at [email protected]