Islamic Microfinance and Rehabilitation

Program for the Slum and Floating

Population by the Waqf Funds:
A Proposal based on Empirical Evidences
for the Muslim Countries

By-
Basharat Hossain
 Objective of the Study

 the main objective of this report is to

 propose a model to start the Islamic

Microfinance and rehabilitation program

 by the Waqf funds

 for the slum and the floating population

among the Muslim countries.
 Methodology of the Study

 Primary data:

◦ On participation in Islamic Microfinance among

the slum people

 Secondary data:

◦ the Global Islamic Finance Report 2012-2017,

◦ Microfinance Regulatory Authority in Bangladesh,
◦ Global Urban Indicators Database 2015 by UN-
Habitat,
◦ websites of the government and central bank of
different countries
 Why is the Integration of Waqf
,Microfinance and Slum population

 Why is the Waqf?

 Islamic Will
 first-rated Islamic charity tools for the public
welfare
 Multi-dimensions: Public, Religious and
Family
 Large Number of Waqf estate & Institutions
among the Muslim Countries
 Waqf Authority and Number of Waqf
Institutions in the Muslim Countries
Country Waqf Authority Number of Waqf Annual contribution
Institutions/Value of to National Waqf
the Waqf Asset Fund
Bangladesh Ministry of Religious 15 9752 BDT 58.67 million
Affairs
Pakistan Ministry of Religious - -
Affairs
Malaysia - 9937 hectares of -
Waqf land worth
RM1.9 billion

Indonesia Ministry of Religious Waqf land -

Affairs 4.2 million meters
Turkey 9000
 Why is the Slum & Floating population
 Tremendous growth of the slum & Floating
population in the Muslim countries

 Burden of the Urbanization

 Unutterable miseries
 Deprived from the Basic Facilities
 Causes of Urban Poverty
 Highly potential for Informal Sector

 Absence of Islamic Charity and Investment

 Potential demanders of Islamic
Microfinance
Table-2: The Status of slum population and
Urban Poverty in the Muslim countries

Country Number of slum % of total urban

population population
(In thousand)
Afghanistan 5155 62.7
Bangladesh 29 273 55.1
Indonesia 29 212 21.8
Iraq 11 383 47.2
Jordan 808 12.9
Pakistan 32 265 45.5
Saudi Arabia 4384 18.0
Syrian 2429 19.3
Turkey 6578 11.9
Yemen 5166 60.8
Why is the Islamic Microfinance
 Islamic Microfinance has both profitable &
Charitable tools.
 Interest free: so exploitation free
 Increase the market share of Islamic
Microfinance industry (current 1%)

 Absence of Islamic Microfinance among the

slum people
 Potential demanders of Islamic
Microfinance
 Table-5: The Coverage of Islamic MFIs
among the slums in Bangladesh
City of Name of the Slum Coverage of Coverage of
Bangladesh slum Population total MFIs in Islamic MFIs
the slum in the slum

Dhaka city, Juraine Rail 5000 3 0

the capital line slum
city Gendaria Rail 7000 6 0
line slum
Kamalapur 10 000 3 0
Rail line slum
Malibag Rail 12 000 4 0
line slum
Khilgaon Rail 500 0 0
line slum
Korail slum 80 000 15 0
Chittagong, Khalpar slum, 5000 3 0
the second Bahadda hat
largest city
 Islamic Microfinance and its coverage in
the Muslim countries

 Value of islamic finance Industry: $2.5

trillion
 Share of Islamic Microfinance industry :1%
 Growth rate of Islamic Mic industry : 20%
 The participation of women 60-80 %
 recovery rate is 99 percent
The Status of Islamic Microfinance in the World
Country Year No of Islamic MFIs No of Total Share in Name of well-known Islamic
(IMFIs) MFIs the MFIs
market
Afghanistan 2017 1 14 - FINCA

Bangladesh 2017 8 703 1% Islami Bank Bangladesh

(IBBL),
Muslim Aid Bangladesh,
Islamic relief Bangladesh
Indonesia 2007 105 64 000 - -

Iraq 2017 6 14 10% Al Takadum,

Pakistan 2017 15 31 0.9% Akhuwat

Islamic Relief Pakistan (IRP)
Yemen 2017 12 - - Al-Hudaidah,
Al Amal Microfinance Bank
Sudan 2017 7 7 - -
9 banks
Malaysia 2017 2 - - AIM and Bank Rakyat.

Iran 2008 7000 7000 Qard al-Hasan

Maldives 2017 1 - -

Bahrain 2017 1 2 - Family Bank

Algeria 2017 1 - -
 Islamic Microfinance Model by Waqf
Funds for Slum Piopulation

Stage-1: Revival of Stage-2: Fund Stage-3: Islamic Stage-4: Stage-5: Forward

Waqf asset & collection Microfinance Rehabilitation linkage & contribute
Registration to society

Microcredit Other than

Data on Waqf Microcredit
Institutions & slum
population

Slum people with housing &

basic facilities
Statistics department
of the country
Slum people without
Monthly fee and Investment housing & basic
income from Waqf facilities
instiututions
Stage-4: Stage-4: Rehabilitation
Rehabilitation

Eligible for full pledge

microfinance

Capable to do job/do something; Incorporating into job/Business; thus contribute to society

 The Model
 Two parts:
5 Stages of the model & Implementation

Implementation:

i. Formation an independent Institution: Waqf

Management Authority (WMA)

ii. 5 departments:
a) Statistics department
b) Fund Accumulation and Financing department
c) Islamic Microfinance department
d) Rehabilitation department
e) Public Relation and the forward linkage department
 Part-1: 5 Stages of the Model

 Stage-1: Revival and registration of the Waqf estate

and institution

 Stage-2: Fund Accumulation

 Stage-3: Islamic Microfinance by the Waqf Fund

 Stage-4: Rehabilitation of slum people by the Waqf

Fund

 Stage-5: Slum people contribute to the society

 Implementation: Formation and Functions Waqf
Management Authority (WMA)
 Formation
◦ An independent institution
◦ joint venture of Government and Private Islamic
authority.
◦ joint committee from
 the government of the respective country
 the national Islamic institutions
 The international Islamic institutions-IDB

◦ Government and Private authority will provide

 the logistic supports
 Manpower
 monitor the activities of WMA
 Functions
◦ achieve the goal of 5 stages
◦ Functioning through 5 departments
Waqf Management Authority (WMA):Functions
of 5 departments
a) Statistics department
Fulfill the goal of the first stage

Function-1:
collecting the data on the Waqf estates , Waqf institutions of
the country

Function-2:
collecting the data on the number of slums, slum population,
floating population and landless slum population

 This department may take help from the Govt offices

 Waqf Management Authority (WMA):Functions
of Fund Accumulation departments
 Fulfill the goal of the second stage
 Accumulation of Funds
 Central Waqf Fund:

Direct Income from Waqf

Cash Waqf asset or Bulding under the
(Personal+ Institutional) Central supervision of the
Waqf Government
Fund
Monthly contribution to CWF Monthly Voluntary
(CWF)
(Public Waqf + Religiuos contribution to CWF
Waqf) (Family Waqf)
 Waqf Management Authority (WMA):Functions
of Islamic Microfinance departments
 fulfill the goal of the third stage

 Full pledge Islamic Microfinance for

◦ Slum people with housing & basic facilities

 Partial: Other than Microcredit for

◦ Floating people without housing & basic
facilities

 After Rehabilitation: Full pledge Islamic

Microfinance for
◦ Slum people without housing & basic facilities


 Waqf Management Authority (WMA):Functions
of Rehabilitation departments
 Fulfill the goal of the 4th stage
 Functions:
Rehabilitate the landless slum peopl & Floating People
who live on the footpath or roadside

 The process of Rehabilitation

The land for rehabilitation may be
◦ acquired or bought by the WMA
◦ with the help of the government
◦ houses will be constructed with the help of the
international Islamic institutions
 The process of Rehabilitation
◦ The Rehabilitation department will form the different
family units.
◦
◦ Each unit may consists five families and rehabilitate
them gradually.

◦ Rehabilitated family will have to pay nominal rent for

the housing unit.

◦ This rent will be added to the central Waqf fund

(CWF).

◦ number of the unit and family may be fixed based

upon the availability of the fund.

◦ This department will brief them about the future

prospect of their life
 Functions of Public Relation and the
Forward Linkage Department
 fulfill the goal of the 5th stage
 Functions:
◦ Making relationship with the several
institutions, centers, companies, firms,
industries,

◦ Creating linkage with the local and

international market and agencies to sell the
handicraft products produced by the
Microfinance borrowers.

◦ Arranging the Microfinance member as a

trainee for part-time or full time job
 Functions of Public Relation and the Forward
Linkage Department
◦ Organization:
 garment industries, security companies, shopping
centers, educational institutions, home service
companies, financial institutions, small and medium
enterprises (SME), non-government organizations
(NGOs) and development agencies.

◦ positions with minimal education:

 peon, bearer, worker in motor repairing and washing
center, electronic product making and repair center
such as refrigerator, television, computer, mobile
servicing, salesmanship, tailoring, etc.

◦ affiliations with different institutions will train and make

and capable the participant for the job then, he/she
will be capable to contribute to the society.
 Conclusion

 Besides Zakah and Sadaqah; Waqf is another

superb instrument
 Using Waqf for Islamic Microfinance Program for
slum population

 This is the high time to reduce the burden of the

slum population among the Muslim countries,

 If we will not take any measures to check it now,

it will create a hell for the Muslim and Humanity
in the near future.
 THANK YOU
VERY MUCH
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LISTENING MY
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