Inclusion of Islamic socio financial institutions for the unbankable hard core poor (a model worth attention)
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The hard core poor are neither bankable nor covered against risks. Whilst micro-finance seems to solve financial inclusion for this group to some extent, albeit at very high costs, very little have been done to provide sufficient cover against risks of all sorts for this group. Some attempts at developing micro-takaful are actually in the pipeline, however, very little concrete and practical solutions have emerged so far. It is of course well-known that Islamic Social Financial Institutions (ISFI), namely zakah, waqf, infaq and qard-hassan are meant to directly benefit the less fortunate in society, but little has been done to ensure that they directly benefit from these institutions. The main objective of this paper is to show how the ISFI can be synergised to overcome this problem. The paper is also intended to show how the ISFI can be integrated within a Micro-Finance Model for alleviating poverty, assisting in providing the basic needs for the hard core poor such as food, shelter, education and health care. Research Methodology - this paper uses both primary and secondary sources. Data collected from primary sources include text from the Quran and from the Sunnah of the Prophet (pbuh), while data collected from secondary sources includes books, articles, journals, annual reports, and websites. Expected findings - Drawing lessons from some existing successful cases there, the expected findings for this paper is to draw the attention from policy marker, researchers to find ways and means how to integrate the ISFI into a viable Micro-Finance Model that will achieve such noble mission at the present time.
Islamic social financial institutions , Zakah , Waqf , Poverty alleviation
A. Mohsin, M. I., Shaikh Abdul Razak, S. H., Alhabshi, S. O., & Sadr, S. K. (2017). Inclusion of Islamic socio financial institutions for the unbankable hard core poor (a model worth attention). In M. Abdul Majid, S. Shamimi, R. Baharin & C. S. Liew (Eds.), Proceedings of the Malaysia National Economic Conference (pp. 401-410). Selangor, Malaysia: Pusat Pengajian Ekonomi, Fakulti Ekonomi dan Pengurusan, Universiti Kebangsaan Malaysia.