Report covers Sudan, Nigeria, Kenya, Mauritius, South Africa, Tanzania
Jeddah, KSA: The Islamic Research and Training Institute (IRTI) of the Islamic Development Bank Group today launched the Islamic Social Finance Report 2015, which is the second edition in the series.
IRTI released the report during a conference on "Awqaf, Zakah and Ethical Microfinance as tools for Empowerment", organized by the South African National Zakah Fund (SANZAF) in Pretoria, South Africa.
This edition of the ISFR focuses on the Sub-Saharan Africa, outlining the regional trends and prospects as well as proposing policy recommendations for the Islamic social finance sector, which includes zakah, waqf and Islamic microfinance.
It analyzed the regulatory environments and practices in six selected countries, namely Sudan, Nigeria, Kenya, Mauritius, South Africa and Tanzania.
Findings show that Sudan, Nigeria and South Africa can easily generate adequate resources for poverty alleviation through zakah, while Islamic social finance also has great potential for curbing poverty in the three other countries studied.
The report estimates the annual zakah potential in Sudan, Nigeria and South Africa at about USD 1,843.51 million, USD 8,776.45 million and USD 178.87 million respectively. However, the actual collection in 2013 was USD 220 million, USD 3 million and USD 100 million respectively.
Key recommendations include enhancing the legal frameworks for Islamic social finance; institutionalizing zakah collection and distribution; offering unique microfinance products for smallholder farmers; and allowing waqf creation by non-Muslims.
The report notes that collection of in-kind zakah from locations like farms comes with high costs, and therefore recommends a review of the cap on operational costs, given the predominance of agriculture in the countries studied.
Findings further show that while compulsory zakah remittances obviously boost collection levels, as in Sudan, such policy has not been successful in parts of Nigeria because of lack of enforcement mechanism. Incentives in the form of tax rebates for zakah payments have also helped in Sudan.
In his comments on the report, IRTI Director General Prof. Mohamed Azmi Omar said, "By focusing on Sub-Saharan Africa, we hope that this issue of the ISFR will satisfy a long-felt need for adequate and relevant information that will help towards instituting an enabling environment for the Islamic social finance sector in the region."
Dr. Mohammed Obaidullah, who is the leader of the IRTI team that produced the report, represented the DG at the launching.
IRTI instituted the ISFR series last year with the aim of providing relevant data and policy roadmaps that could assist the campaign to end poverty in all its forms globally.
The maiden edition focused on South Asian and South East Asian countries, including Indonesia, Malaysia, Singapore, Brunei Darussalam, India, Pakistan and Bangladesh. Subsequent editions will study other regions, the IRTI Director General said.
The Islamic Research and Training Institute (IRTI) is a member of the Islamic Development Bank Group responsible for leading the development and sustenance of a dynamic and comprehensive Islamic financial services industry that supports socio-economic development in member countries.
Contacts:
For enquiries on the report: Mohammed Obaidullah (mobaidullah@isdb.org)
For media enquiries on IRTI: Mohamed Salat (msalat@isdb.org)
© Press Release 2015
