By Denise Marray/Gulf Times Correspondent /London
Islamic Relief and Al Rayan Bank are teaming up to support Shariah-compliant microfinance through fundraising activities, which will help empower people to establish social enterprise businesses in their home countries and work their way out of poverty.
Al Rayan Bank has appointed Islamic Relief, one of largest Islamic NGOs (non-governmental organisations) in the world, as its exclusive charity partner for 2017. The partnership was announced at Islamic Relief’s headquarters in Waterloo, London on Tuesday and is focussed on the charity’s “Sustainable Livelihoods” programme.
Imran Madden, UK director of Islamic Relief, said, “We are delighted that Al Rayan Bank has chosen Islamic Relief to be its exclusive charity partner for 2017. As one of the world’s largest Islamic NGOs, we are the ideal partner for the largest Shariah-compliant retail Bank in the UK.
“Islamic Relief is well known for our disaster and emergency relief work around the world. But perhaps less well known is our Sustainable Livelihoods programme, which helps people by supporting them to start their own businesses as a means of alleviating poverty with dignity.
“Inequalities in global wealth distribution mean that innovative approaches are needed to achieve change. Our partnership with Al Rayan Bank will help us to enable communities to become self-sufficient and independent.”
Microfinance, where entrepreneurs in developing countries are given access to financial services that would otherwise be unavailable to them, is recognised as a key strategy to help those living in poverty to become financially independent. Islamic microfinance is designed to cater for poor people in predominantly Muslim countries.
One microfinance project Al Rayan Bank will be supporting through fundraising activities is in the Republic of Mali, West Africa. The project has empowered local women, providing them with an opportunity to build a better life for themselves and their families.
Money is made available using the Islamic finance principle of Qard Hasan (loan without benefit). The women are then able to use this money to commercially harvest the nut of the African Shea tree and create Shea Butter, which can then be used in various products.
Commenting on the Mali Shea Butter microfinance project, Sultan Choudhury, CEO of Al Rayan Bank, said, “Islamic banking is a socially responsible form of banking, which is concerned with the effect of its activities on society as a whole.
“As the UK’s largest Islamic retail Bank, we understand the power of inclusive banking for everyone, regardless of faith. It is something that we have championed in the UK since our inception in 2004 and something that we are therefore very pleased to now support in Mali, through our fundraising partnership with Islamic Relief.”
In Mali, the microfinance sector is not consistently regulated and, as is the case elsewhere in the developing world, the financial infrastructure is poor, requiring what is referred to as a “village banking” model. Money raised by Islamic Relief and Al Rayan Bank make it possible for the local community to organise themselves into self-help groups or co-operatives (the “village bank”) that mobilise capital through savings deposits from its members and then in turn provide loans that do not include interest.
Seema Khan, head of major gifts at Islamic Relief UK, said, “Our microfinance partnership with Al Rayan Bank is an intelligent solution to helping people around the world out of poverty.”