Sadaqah House Banking Product Can Tackle Socio-Economic Problems, Says Don

By Nurhafizah Ghazali KUALA LUMPUR, Oct 12 (Bernama) -- Islamic banking institutions can help tackle socio-economic problems by offering Sadaqah House or 'Bait as-Sadaqah', said an educationist from International Islamic University College Selangor (KUIS). Sadaqah House, an investment banking product, can close the class gap between the poor and the rich by serving the financial requirements and demands of the social welfare sector, said Director of International Research Centre of Islamic Economics and Finance (IRCIEF) at KUIS, Dr Latifa Bibi Musafar Hameed. She said this initiative, started by Bank Islam Malaysia Bhd's former and founding Managing Director Dr Abdul Halim Ismail, would see licensed banks as trustees to crowdfund sadaqah (donations) from customers and invest the money later. "Profits from the investments made will be contributed to the needy in the form of sadaqah and business grants, among others, while the initial crowdfunded sadaqah will remain in the fund to be invested again. "This would help mitigate poverty and unemployment, when the poor and the needy are able to survive, through the initiative," she told Bernama on the sidelines of the recent IRCIEF and Islamic Research and Training Institute's '2016 Quarterly Islamic Finance Public Lecture on Social Economy' here. Latifah noted that Islamic banking institutions can also distinguish themselves from their conventional counterparts by adapting the 'ijtimai' or social welfare element. She said banks can offer Sadaqa House by leveraging on their existing infrastructure. "But they will need to further investigate how to realise it, congruent to their institutions, and the effort needs to start from now. "Society has a high tendency to donate and we foresee good acceptance for it," she added. Meanwhile, Deputy Minister in the Prime Minister’s Department, Dr Asyraf Wajdi Dusuki, said many institutions in the social welfare sector, such as those related to sadaqah and waqf, can be further developed and optimised. "Malaysia can be the pioneer in the Islamic social welfare sector if focus is given on the segment," he said, stressing the need to understand Islamic finance and banking products moving forward to realise the 'maqasid shariah' agenda. -- BERNAMA