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Is Islamic Finance Working? | Blog



There has been much hype about the growth of Islamic financial institutions in Kenya and globally, yet I have always been critical of the impact Islamic financial institutions have on the Muslim population, the majority of whom live below the poverty line.  My biggest concern was, and is, that most of these institutions focus on bringing monetary and capital gain to their shareholders. I have no problem with this goal, but it is my belief that Islam is a religion that gives solutions to the needs and problems facing humanity. I must reiterate that it is important for the shareholders to get value for their investment, but we have to make it different from the conventional system. They both have the same goal, to increase the shareholders’ value, but this goal should align with that of uplifting the ummah as a whole.

The capitalist system is failing -has failed -and it is the cause of great economic, social and political suffering in the world. Muslims and non-Muslims attest to this fact and that is why we need an alternative. And the only alternative to is to go back to the Quran and the Sunnah. Islam is complete, governing and directing us in every aspect of our lives. It is the only path that we have to get us out of this economic mess. Alhamdulillah, the whole world is running towards the reality of the Islamic economy and financial system. It is the only viable alternative.

Financial Islamic intuitions in Kenya should try, as much as possible, to bring the poverty-stricken Muslim populace into the financial field. We have to pause here and ask ourselves this vital question, are Islamic financial institutions working towards that in how they conduct their business? Most of them have been in operation for at least the last six years with the exception of Takaful, yet have we seen any difference? Can we confidently say that Islamic finance has worked for us and it has been able to achieve the objectives of the Shari’ah (maqasidu Shari’ah) because they advertise themselves as Shari’ah-Compliant institutions? I have my own answers to these questions, and they look grim.

To be clear, I am appreciative of the effort expensed to bring Islamic finance to the general Kenyan public. It is a milestone achievement and May Allah increase in goodness and reward all those who have worked towards seeing Islamic finance being a reality in Kenya, Ameen.

Now that we have it with us, it is incumbent upon us to ensure that its operations are in line with the goals of the Shari’ah. Moreover, that it positively affects the large number of Muslims and non-Muslims struggling in the conventional economic system. We are the defenders of this magnificent concept of Islamic finance and we should protect it from being hijacked to suit individuals’ needs and greed. It is the only way we can ensure Islamic finance is operating in line with the objectives of the Shari’ah, i.e. that it alleviates poverty.

If you have a contrary opinion, I would gladly like to hear and learn more. Leave them in the comment section!

photo credit: Vít Hassan via photopin cc


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