Published on October 2022 | Islamic Social Finance

ISLAMIC SOCIAL FINANCE: A SUSTAINABLE SOLUTION TO POVERTY ALLEVIATION

Islamic financial intermediation is primarily based on the philosophy of socio-economic justice. The risk sharing mechanism of Islamic finance contracts, increases the scope of development for the marginalized. In the contemporary discourse of Islamic finance, the emergence of social finance based on the redistributive system of Islam has contributed to the Alleviation of poverty and need fulfillment to large extent. The instruments of redistributive nature viz, zakah, waqf (plural Awqaf ) Sadaqah, Qarḍ al Hassan etc. can be explored for the socio-economic Upliftment of the marginalized, through proper management and disbursement. Moreover, Islamic Social Finance can play an ethical and acceptable role in eradicating poverty and hunger thus narrowing the gap between affluent and deprived. The present paper in context through qualitative analysis argues that Islamic social finance has the capacity for poverty alleviation that can be explored for economic empowerment and sustainable solutions to combat the marginalization in the Muslim world in general.