According to the Food and Agriculture Organization of the United Nations around 800 million people faced hunger in 2020. It also states that nearly one in three, or 2.37 billion people did not have access to adequate food in the same year. Another report also from the UN states that enough food is produced to feed everyone on the planet, yet hunger is on the rise in some parts of the world. This is indicative of the fact that the cause of hunger and poverty is not lack of resources but unequal access to resources.

This inequality isn’t only found between different countries. The latest data from the Federal Reserve in the US indicates that the top 1 % of Americans have a net worth that exceeds the middle 60 % of Americans. In 2020, when many lost their livelihoods, the top 1 % of Americans added 4 trillion Dollars to their wealth. This is more than the total wealth of the bottom 50 % of Americans in the same year. Unfortunately, South Africa doesn’t defy this trend. South Arica has the highest level of inequality in the world. With at least half of South Africans living in poverty, you may be wondering how does Islamic finance address this issue?

There are numerous charities and philanthropic organizations are doing amazing work in our communities. They are a shining light and a source of pride. Similarly, we need to acknowledge the immense progress Islamic finance has made in the last few decades to create reasonable alternatives to conventional finance. However, what we see very little of is the amalgamation of Islamic finance and philanthropy to create financially feasible and sustainable models of Islamic social finance.

The modern concept of Islamic finance resulted from a unique synergy of financial analysis, backend processors, legal procedures and the ossification of traditional Islamic jurisprudence. This has led to a sustainable and profitable model of finance that is in line with the law of the land as well as Islamic ethics(shariah). Some of the methodologies used for social development in the past were waqf (perpetual communal property), qardh hassan (gracious interest free loan) and sadaqah (voluntary charity). However, new methodologies which are in line Islamic ethics and are sustainable can be developed such as social sukuks and fintech based charity applications.

Innate in the Islamic philosophy of wealth is that wealth is not meant to circulate among the rich (Qur’an 59:7). More unequal societies also tend to have more violence and crime. Therefore, it is not only a moral responsibility, but also an existential requirement, that we develop models of finance that is more just, equitable and in line with the Islamic philosophy of wealth.

Allah knows best