Innovation in Islamic Social Finance: A Brief Snapshot

The role of Islamic social finance assumes great significance, as it can be potentially tapped to address the global shortage of humanitarian aid. It can be provided to aid countries made vulnerable by conflicts and poverty. Islamic social funds include zakat (compulsory tax on wealth), sadaqah (charitable acts) and waqf (endowment).

To fulfill this objective, it is imperative to first know the extent to which Islamic social funds can meet the resource requirements for poverty alleviation, and whether the current distribution of Islamic social funds to the poor have been effectively managed and distributed.

It is observable that even though the total amount of Islamic social funds given yearly is huge, the poorest and neediest communities and countries are Muslim. Let...