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  • From the Guardian: Islamic finance and the worldwide social enterprise movement

    Ogilvy Noor’s Vice President Shelina Janmohamed took part in a live online discussion at the Guardian’s website on the relationship between Islam and social enterprise. Here is an extract pasted below. You can read the full discussion with other participants here.

    Islamic Finance and a more ethical capitalism go hand-in-hand

    Expert advice from our recent live debate on how the Quran’s teachings chime with the objectives of the worldwide social enterprise movement.

    Research shows faith affects consumption: My organisation’s interest is in understanding what Muslims are looking for, and the values that drive them. We did a piece of research that found that over 90% of Muslims say that their faith affects their consumption. There is a full publication of the study called Brands, Islam and the new Muslim consumer, plus extracts and explanatory articles on our website.

    Confusion exists over what “Sharia compliant” means: Where financial products have run into challenges when marketed as Islamic or sharia compliant is that the consumer is baffled as to what this actually entails, how to assess its Islamic credentials, and this is combined with a big helping of scepticism. Products need to be clearly communicated, and their Islamic credentials presented honestly and transparently. “What is it that makes it Islamic?” and “how can I trust it?” are the important questions.

    Charitable donations are important: One of the challenges is to understand the role of social enterprise and its relationship to charity and development work. Social work is rightly a form of charity, but often Muslims in minority countries still feel a strong connection to ‘back home’ and feel that charitable donations are most needed/best value for money (so to speak) in poorer developing nations. It’s an attitude that needs to change because communities (in the Western world) need investment too.

    The principles of waqf and qard hassana: There are some funding mechanisms which are inherent in Islam which ought to have higher profile in social structures. Two are examples are Waqf, which are a kind of charitable holdings that pay out investments, and qard hassana, where people give a goodly loan out of their savings to others that need it – or for people who put their savings in a bank but don’t want interest. The money would then be invested in a halal fashion. I think the old building societies, co-ops and mutuals had related philosophies. Crowdfunding is a newer method that is seen as potentially Islamic.

    Mosques could perhaps be seen as original social enterprises:Mosques have always had shops and other facilities in the lower floors which allowed for trading, and in some cases the rent from the retail outlets would pay for the upkeep of the mosque.

    Aziziye Mosque in North London has a halal butcher and a popular restaurant in the basement

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