Francine Pickup, UNDP Deputy Country Director

2nd Annual Islamic Finance Conference: The Role of Islamic Finance in

Eradicating Poverty and Income Inequality

Jogyakarta, Indonesia Wednesday 23 August 2017

• Universal call to action
• Building on MDGs, the region is experiencing much progress but
there are challenges ahead to meet the SDGs
• The interconnectedness of the 2030 agenda highlights the complexity
of the challenges such as climate change and gender equality
• Partnerships at the core
Estimated investment gap in key SDG sectors, 2015-30

https://www.weforum.org/agenda/2016/07/blended-finance-sustainable-
development-goals/
 700
US$ Billions

600
Domestic public
500
Domestic private
400
International private
300

200
International public
100

0
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

UNDP, using constant 2015 USD prices

 DI calculations
based on multiple sources
to
• Source of finance: Assets expected to exceed $3 trillion by 2020;
• Growth potential: Islamic finance industry has expanded rapidly over
past decade, growing at 10-12% annually;
• Underlying philosophy: Embodies socially responsible development
Networks and partnerships: Religion as a force of change in the world
and engaging w religious organisations is crucial for peace,
development and promoting tolerance.

Islamic finance has tremendous potential to contribute to SDGs but

largely untapped and overlooked.
• Potential in countries with large Muslim populations & high poverty
• Typically zakat is given informally, individually from person to person
• Approx. ¼ contributions channeled thru formal certified orgs
• Focus on act of giving, not development impact or rights of recipients
• Shift needed from charity to programme with professional mgmt
• Giving to higher level causes, not individuals, for greater impact
• Longer term, sustainable impact needs capacity devt thru formal orgs.
Faith (hifdh-ul-iman) : SDG goals 1,2,3,6,
and 10 focuses on reducing vulnerability
which in turn is believed to help strengthen
their faith.

Life (hifdh-ul-nafs) : Zakat aligns with Goals

2,3,6,8, and 11 in ensuring healthy lives and
promoting well-being for sustainable
development.

Progeny (hifdh-ul-nasl) : Zakat that helps

people escape the poverty trap, promoting
peace, and protecting the environment such
as goals 3,5,7,11,12,13,14,15, and 16 is
consistent with human progeny.

Intellect (hifdh-ul-aqal) : Zakat’s alignment

with SDG 1,2, and 9 facilitates access to
healthy nourishment, quality education, and
make children more productive in the
future.

Wealth (hifdh-ul-maal) : Zakat has inbuilt

wealth transfer (SDG 10) which can help
generate economic activity (SDG 8) and a
social safety net (SDG 1 and 3).
Indonesia’s National Zakat Body, BAZNAS,
extends first contribution to support SDGs
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