Banking Focus On New Zealand World

Financing Awqaf

Awqaf organisations continue to face challenges in developing their asset base to generate sustainable revenue streams that will help achieve the goals of these institutions. This is a bigger challenge for the growing Muslim populations in non-Muslim countries. In addition to the nature of the industry and a lack of human resources capacity and capability in the sector combined with complications of legislative environments and the localised focus they operate under the biggest issue continues to be the lack of a source of funding to develop underlying asset bases and infrastructure. The inability to attract investment into vital projects that are needed in the community means the development of our communities are falling behind in many part s of the world.

The traditional financial institutions including Islamic banks have kept away from this important sector for obvious commercial and business reasons. No tools, products and services are widely available for the sector. In some parts of the developed world there are dedicated financial institutions and funding platforms serving this sector but not at a global scale. The private individuals and organisationswith charitable intentions do not have a credible platform to operate within in order to participate and contribute to the development of the Awqaf sector.

In order to find suitable solutions it is important to start making progress via tangible projects at a grass root level that people can relate to and understand well. Awqaf New Zealand has been working on these “ideas” over the last two to three years and has made significant progress in forming partnerships with other Awqaf institutions all over the world. The target audience has been the Muslims in the West where there is no proper framework or structure for developing Awqaf for the benefit of our future generations.  Awqaf New Zealand has focused on utilising existing opportunities available to our community and then looked at innovative ways of re organising the way we do things using both the modern and traditional ways of organising social enterprise that will ultimately benefit humanity. Our Adhahi/Qurbani project idea was recognised globally when we won the inaugural 2013 Islamic Economy Award in Dubai under the Awqaf category.

The Muslim community is in anideal position to fill the gap identified above and establish a new Awqaf model including a sustainable financing model in the future. We need to have a shift in the thinking from a “local” view to a “global” view. The Islamic economy has a number of cross border activities that can generate significant revenue sources such as Adhahi/ Qurbani, Zakat Al Fitair, Hajj pilgrimage to name a few. These activities are globally spread and are growing year on year. Currently these sectors are catered to by the private sector and the market based economy and not very efficiently organised resulting in wastage of materials and money. The Awqaf sector can play a significant role in participating in the supply chain of these sectors with the returns invested back in communitydevelopment globally.

The underlying activities can range from owning Awqaf farms, Awqaf Logistics centres, Awqaf shops and warehouses, Awqaf Banks and the like. The current asset profiles makes it ideally suited to develop these new activities given the sector owns substantial land, real estate assets globally. What we need is to source investment funds to establish the basic infrastructure necessary to get the supply chain flow of goods and services underway.

The underlying funding mechanism can be established through Qard Al Hassan, Awqaf Sukuk where the donors globally can participate in the investment program based on their objectives and preferences. The necessary financing vehicles and institutions will need to be established with credible Government institutions, Islamic banks, Awqaf sector and Private sector partnerships in key global hubs like London, Dubai, North America, Singapore, Malaysia etc. We need to create global investment fundssuch as “Qard Al Hassan Cash Waqf Fund” and“Global Crowd Funding Platforms” backed by government institutions and agencies to build credibility, confidence and acceptance by the wider community. The funds can be invested via these institutions in global Awqaf projects and initiatives within a well-defined investment and development framework.

This model not only bridges the Gap between the Profit & Non-Profit Sectors but also helps develop both sectors in many ways as:

  • Balancing the Islamic Economy
  • Enhance the efficiency of the Non-Profit Sector
  • Revive and apply the Sunnah of Qard Al Hassan
  • Develop new Islamic Finance Tools for the Non-Profit Sector
  • Provide secured infrastructure to globalize the Awqaf Industry

Leave a Reply

Your email address will not be published. Required fields are marked *