Tuesday, July 14, 2020

Islamic Social Finance and Its Role for Achieving Sustainable Development Goals

'Islamic Social Finance' can be understood broadly as a framework or an approach for delivering greater social good following the teachings and principles of Islam with respect to morality and ethics.  Worldwide the Islamic banking and finance sector is huge that was worth more than $2.4 trillion at the end of 2018, whilst zakat contributions are estimated to be between $200 billion and $1 trillion a year (IRW). The major components of Islamic Social Finance (ISF) include, inter alia, charities such Zakat (obligatory charity), sadaqah (voluntary charity) and wqaf (endowment), cooperation, like qard (loan) and takaful (insurance). On the social investment side, it covers sukuk (bonds), and non-profit Islamic microfinance investments that offers qard hasan (interest-free loans). 

UN SDG Reporting – UFI The Global Association of the Exhibition ...

The underlying goal is to share the wealth of the society with the needy and the poor and pro-activity act against exploitation of the disadvantaged. In fact, this overarching principle is at the root of Islamic Finance that aims at promoting social justice through wealth sharing and fair financial activities among the members of the society. In fact, Islamic Finance engulfs the social aspect or social finance perspectives that envisages that the share of community wealth like Zakat percolates down to those who are in need. This makes ISF a major avenue to inclusive development of a society. At the same time, inclusivity in our socio-economic growth paradigm is at the centre of the Sustainable Development Goals (SDGs). Hence, it is obvious that ISF is by nature can contribute a lot to the achievement of the SDGs in many countries and societies. The essence of Islamic world view is enshrined in the Holy Quran where Allah (swt) says: “Help one another in acts of piety and righteousness. And do not assist each other in acts of sinfulness and transgression. And be aware of Allah. Verily, Allah is severe in punishment” (Quran 5:2).

Against this backdrop, various Islamic scholars and social, economic and financial organisations have highlighted as to how ISF can be better utilised to uplift the society. In 2018, the International Waqf Core Principles were announced by the IMF and World Bank providing the standards on disclosure and transparency. Another international agency UNDP also emphasised on the use of blockchain enhanced digital platform to not only increase Waqf fund but also to ensure more effective use of Waqf land for the betterment of the society. There are a number of initiatives coming to the limelight from various parts of the world. Indonesia’s national Zakat collection agency and UNDP collaborated on benchmarks that were shared in their report entitled 'Unlocking the Potential of Zakat and Other Forms of Islamic Finance to Achieve the SDGs in Indonesia'. These and many other success stories that correlated the objectives of the SDGs and ISF principles. Impressive impact of judicious use of Zakat funds on the ground are being reported that indicated a 27 percent increase in beneficiaries’ monthly income that is propelled by the Zakat-enabled assistance in Indonesia (UNDP & BAZNAS, 2018). 

ISF components like Zakat, Islamic microfinance, Waqf and Sukuk can help reducing poverty by promoting an inclusive and sustainable economic growth in the society reaching out to the poorest of the poor. Combining traditional resources like Zakat fund with other sources of Islamic Finance can boost growth of small businesses and entrepreneurship and thus promote financial inclusion in a community. Waqf can also be considered a flexible form charity that can be leveraged for supporting livelihood avenues for the downtrodden and them increase their income. While Zakat, Islamic microfinance and Waqf are largely seen as a charitable forms of funding, Sukuk (Islamic bonds) can be used a more commercial route to support social entrepreneurship projects that are in turn going to add value to the achievements of the SDGs.

Good governance and transparency in ISF activities with lowers operational costs, more accuracy in regular reporting makes the available resources more reachable and accessible to the potential beneficiaries. If implemented in tandem with the declared roadmaps of the SDGs in respective continues, ISF can help people grow and see the impacts more on the ground. Periodic impact assessment can further help them to scale up the initiatives to a larger population and such models can be replicated by other countries also. To move in that direction, ISF stakeholders need to focus of the scale, inclusiveness, and programme differentiation aspects of their projects. At the same time, in the emerging world of big data and artificial intelligence the ISF actors also need to new technological applications with sound governance practices, and establish mutual beneficial partnerships with organisations like UNDP and IMF to visibility of their initiatives. 

Besides the charitable nature of the resources generated by the richer sections of the communities themselves, ISF can be strongly grounded in commercial and social dimensions. There is convergence between the nature, aims and principles of ISF and the SDGs, as both are geared towards poverty reduction, livelihood generation and mitigating economic disparity in the society through redistributing wealth. In particular Zakat and the SDGs related closely to the five distinctive principles of Islam in terms of preserving – 

(1) Faith: by reducing physical, social and moral vulnerabilities by mitigating poverty, hunger, poor health, unsafe water and inequality (SDGs 1, 2, 3, 6, 10);
(2) Life: by alleviating food diffidence, supporting healthy lives, ensuring drinkable water, safe, sustainable and hygienic living conditions, providing employment and livelihood (SDGs 2, 3, 6, 8, 11);
(3) Progeny: by ensuring peace and security in the society and protecting the natural environment (SDGs 3, 5, 7, 11,12, 13, 14, 15, 16);
(4) Intellect: by offering adequate nourishment and quality education to the children in order develop enabled human capital (SDGs 1, 2, 9); and
(5) Wealth: by supporting necessary economic activity and providing a social safety net (SDGs 1, 3, 8, 10). (Noor and Pickup, 2017)

To sum up, ISF strengthens the philosophy of sharing, caring and cooperation for the common social development that also support the SDGs. If SDGs are humanity’s common call today to end hardships of the millions of poor across the world, preserve the environment, peace and security, then ISF can be a leading light in that direction. The need of the hour to see how fast we can achieve this synthesis in our socio-economic development endeavours. 



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Reference: 
Islamic Relief Worldwide (n.d). “What you need to know about Islamic social finance.” Retrieved from https://www.islamic-relief.org/islamic-social-finance/ 
UNDP and BAZNAS (2018). The Potential of Zakat and Other Forms of Islamic Finance to Achieve the SDGs in Indonesia. A report. 
Noor, Zainulbahar and Pickup, Francine (2017). The role of zakat in supporting the Sustainable Development Goals. UNDP & BAZANAS brief.

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The Keys to Success: Developing Effective Working Habits


Many a times I am invited to various institutions and asked to deliver motivational speech to the gathering of students and youth. The organisers often think that an IIM Professor must have some secret ‘tips’ or keys to success up his sleeves that can transform the audience overnight. But it’s a fallacy to expect that a onetime motivational push will transform a person and change his/her life altogether. At best it can be a spark of fire that can either whimper away soon or ignite a temporary zeal towards a particular aim. I would therefore begin with a few caveats. First, the strategic advice that I will present here in this article will only impact the reader’s life or working style if only he or she inculcate them as ‘working habits’ in the long run. After all it is said that there is no shortcut to success. Second, these are not my entirely original ideas, rather a collection of insights that I received from my father and some prominent teachers who has influenced my life.


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Working Habits: Starting Early

Let us define the term ‘working habit’ first. It is generally defines as “physical or mental effort directed towards doing or making something.” My late father Prof Md Fokhrul Islam(1) used to mention it all time in our childhood and told us to develop working habits early in life. He used to get up very early in the morning for Tahajjud prayers[1] and wake us up early in the morning. As young kids (me and my younger brother) used to hate it so much to get up from bed so early, especially in the winter. My father obviously did not force us to join him in Tahajjud(2) but very discerningly start his prayers reciting Quran so loudly that it was almost impossible for us to continue lying in bed for long and ultimately we had to get up and join him on way to Masjid for Fazar prayers. Often in this context he used to tell us that a key to success in life is to develop working habits and if we want to succeed in anything we must consciously work towards development of such working habit such as waking up early in the morning through sustained efforts. He used to further explain that once developed such habits will become a part of our daily lives and later it will not be as disdainful as it seems in the beginning. This one working habit that I got from my father is to my mind is the single most important habit that a student must develop in order gain a leap forward in studies and profession. My father used to explain that by waking up early every day say two hour earlier than others we would gain a 730 Hours of extra time in a year and there is no syllabus or course that could not be mastered in that amount of time. If one gets up at 7 am every day, he/she must try to develop the habit of getting up at 5 am. But the bottom line is to develop it as a habit rather than what we usually do during the exam days. Getting up early only during exams and studying hard is not the point rather getting into a long term habit formation is the key. Now, even if there is no exam preparation and it’s a holiday one must not forget to get up early and used the time as a habit by doing something light. My father used to say just read books, magazines or do whatever we like during that extra time in the morning so that the habit gets into our body clock. After years of practicing this working habit let me tell you that it is a tested formula. I am a terrible time manager as I indulge in a lot of multitasking and I tried so many books and training on time management – but I failed to benefit from any. The only thing that helped me to survive is this working habit of getting up early every day that my father taught me. I would like to pass it on to our next generation as I feel guilty of being a so called ‘modern’ father with English School kids whom I see getting up ‘late’ in the morning and struggling to catch the school bus with a fretting mother constantly at their back. If this generation of parents with Tahajjud is increasingly becoming a rarity, it falls upon us individually to develop this working habit with the help alarm clocks ourselves.

One Thing a Day

Modern times are times of distractions as information/media channels have increased manifolds. Gone are the days when we used to have only a black and white TV as the only diversion in our lives (that too only in a few families in late 1980s). With the advent of Internet and social media coupled with business strategies like Jio free broadband, todays youths are in a more challenging times to concentrate on something. Parents are worried as they find their kids increasingly glued to their Facebook, Instagram or Facebook while the young ones take these things as an essential part of their existence. But, how can we develop something good a beneficial working habit from these ‘distractions’. Again I will draw something from my father. He gave us two small notebooks one day and asked us both brothers write ‘one thing’ that we learnt that day. He insisted that we write ‘something’ that we learnt from somewhere that day. He used to tell us his childhood stories of how in the absence of any additional books at home besides the textbooks, he used to pick up pieces of papers from the road on his daily trips to schools and search for a new word! My father used to walk a few miles every day from his village Kabaribond on bank of river Longai to his school (Patherkandi Model Higher Secondary) in Karimganj district in Assam. He used to come back from school with those waste papers and search a new word that he did not know and look for their meaning in the dictionary. That’s how he built his vocabulary. Now a days I often fund students who are otherwise talented in their studies fumble for words while speaking and making a mess of their presentation or interviews. The solution is use your innumerable access to modern gadgets and applications like Facebook but develop a working habit of maintaining notebook to write down “one thing” – one word or one new idea/information that you encountered through the day. My father used to say that in that way we will gain at least 365 unique words every year and if we started English in Class V by the time we graduate we would have 3650 unique words in our command. Consider that with the fact that even Shakespeare is said to have introduced only 3000 unique words. This target will be achieved much earlier today our students are exposed to English much earlier.

One thing a day (one unique word and a new idea/information) is therefore the second working habit one must develop in order to boost their success. Once it is a habit, you might even drop the diary / note book thing, but at least think about what one new thing you learnt before you sleep. But, Ii would rather insist on a notebook as it will lead to better retention capacity in terms of spelling and dictionary meaning that you would consult to find the meaning of that word. So, do indulge in your Internet surfing, Facebook interactions but it must add to your working habit of learning a new thing every day. Otherwise no amount of smartphone savvy attitude will help you in making that impression in your interview, writing or speaking.

Note them Down

We are exposed to many oral communication everyday – our class lectures, TV News programs, religious sermons or even special speeches in various events by eminent speakers. That a lot of information that flows around us every day but how much do we retain from these information or use them effectively in our lives? In fact very little. Even the most impactful lecture is wasted soon because it is not enough to understand the ideas, one must also be able to remember them in detail after several weeks or even a month. We love to hear when someone is speaking and we do also pay enough attention to other words when we like them. But, sooner or later we tend to forget them or do not remember them when we need them. This ‘listening only’ habit must be changed and a more effective working habit should be developed that is of “taking notes”.  Always carry a small notebook or slip pad and a pen or pencil in hand even when you are watching say a TV serial. Make it a habit to jot down a word or two when you are listening or watching something. In professional life, never go to a meeting without a notebook and a pen – it will save you from a lot of memory disasters later. As we all know but fail to practice that taking notes encourages concentration and makes memorization easier! With this practice, you'll be able to develop a working habit that will give you the full benefits of active listening.  

While you are developing this working habit of carrying notebook and pen almost everywhere, try to remember the three golden rules: notes should be brief, faithful and organised. During a lecture, it's impossible to write everything down and it is not necessary. Enjoy the TV show or a movie you are watching at home or attending a Waz Mehfil (Islamic religious sermons) in your locality - note down the main idea words that you hear. You can also transcribe the ideas that help you understand in your own words. Once this working habit is fully developed you can easily note down just the main ideas and articulations. You can use your own abbreviations also to save time, as long as you can recognize them afterwards. As you have to use the notes later, accuracy and readability is second important rule. Reread your notes later from the previous lecture / event and you can add any relevant texts t them or look for further information in books, dictionaries or on the Internet. This way you'll be able to stay "connected" to a series of ideas / learning items for a longer period of time and perhaps for the rest of your life. Last but not the least you should “organise: your notes.  It's important to be able to easily recognize the points / ideas you have noted down and to understand their contexts later as to where the discussion of each idea begins and ends. This is why it's best to divide your notes into paragraphs or even bullet points, draw rough flow charts. When several concepts are being listed, structure them in a numbered list in your notes.

Active Reading

One of the most recognised weaknesses among today’s youth is the absence of reading. We often see many talented students with very impressive marksheets. But during interviews when we ask a simple question like what is the last book that they have read 98% of them fail to name a good book or discuss its contents.  Often they will mention a pulp fiction or a trash novel like Three Idiots but even in that book they won’t have any ‘deeper’ understanding. It shows very poorly on the personality of a person who doesn’t have a single book that they read with interest. The person may be a first class engineer or a doctor but without a working habit of reading they often cut a sorry figure in an interview / interaction where someone is looking for a ‘complete personality’ rather than just a degree holder. In a very competitive world where everybody carries impressive marksheets it will often lead to the finer details of a person’s interest that will give him/her an edge over others. So, one must develop the working habit of reading. It is not necessary to read a lot of books but one must develop a habit of “active” reading. Just as with your ability to concentrate, your reading will be affected by the conditions you’re reading in and your personal inclination to reading at the time you choose to. Set a time for regular reading (besides all that you read as a part of your course / profession). Pick up a book that is a classic and understand why it is a classic. Imagine how you come to know about a blockbuster movie that is being released and how you expect a lot of things in that movie as you learnt from the trailers you watched earlier. You enter the cinema theatre or sit in front of TV with a lot of prior interest. This watching is different from what you watch without any plan just to pass time.  Active reading demands that prior knowledge (like trailers) or expectation to play in your mind while reading a book.

In the absence of a habit of active reading, readers will set to read books like tome-pass and may not stop until they've finished the very last word of the last sentence in a book. However, effective ‘active’ readers will ask themselves questions before, during and after their readings. They want to be more informed, they do background reading. To fully understand a text, you need to prepare to read it. Active reading means understanding the author's message. Again, reading can with noting down the key words and information that will help you link the text to a central idea or a plot. The secret to mentally annotating a text while reading is finding a balance between sections you are reading and the rest of the book.

Visualise for Effective Learning

Many people continue to wonder what makes the really successful professionals in life and how they distinguish themselves from the average ones? Why do some students who do so much hard work and seem to study all the time but just get average results? It is the same in the professional career also: some seem to get promotions faster apparently without doing lot of hard work killing themselves while others just survive in the workspace. Some people link it to IQ and genetics or are some other God given talent. The truth is that success in life is not so much determined by sheer intelligence and academic excellence but by ‘effective learning habits’. Developing a working habit of learning demands effective visualisation with analogies and examples. Visualisation skill is the first step in developing effective learning. Say you are learning about power and functions of the prime minister. In learning this part of the course you must also visualise through facts/examples of how a Prime Minister is working. You must carry along a scenic visual of how a Prime Minister is taking various decisions. Learning by virilisation help us to understand and remember an idea for long time. It also helps our expression and we can pass on our ideas to others easily. It helps writing our exam answers well or explain a point at the interviews.

It must be remembered that all information gets into our brain through the sensory pathways: Ears, eyes, skin, nose, and tongue. Successful people realize that to learn something, it must be experienced and in the absence of a fast hand experience (say you are unlikely of be a Prime Minister to understand the power and function of that position), you must take the recourse of ‘visualisation’ adding what you watch on TV, read in newspapers and books about the Prime Minister. This will help your understanding of the subject / issue much better and gradually you will add this as your working habit to visualise with suitable examples about anything you say or read.

Start Developing Working Habit Today

A million dollar question now arises in your mind that you are already entrenched into some habits and it seems extremely difficult to change them (say to get up two hours early from tomorrow). Is it possible to change your habits or develop new working habits now? The answer is a definitive yes. Through some strategic changes in your life style and a serious intent you can develop the few extremely successful working habits that we discussed above can be cultivated by anybody at any stage of their lives. If you’re serious about doing things better than you are now – in other words, if you want to develop some of these working habits – then you have to start small. Like any typical habits like brushing your teeth, taking bath initial actions shall be small enough that you will not even think about them later. Once developed you will simply do them automatically. They are tiny actions taken daily that slowly become consistent behaviour associated with your personality. If you want to form new habits, the best way to start would be to make tiny changes like putting the alarm clock say 15 min earlier than your typical wakeup time. Every week you reverse the time by 15 minutes and you will see that our brain could quickly learn and automatically repeat a habit easily. A few months later you will see that you are in fact waking up two hours earlier!

The typical mistake is to get super surcharged as soon as you one gets an inspirational lecture or read an impressive how-to-do book and get high on a sudden flow of motivation. Invariably he/she will fail quickly and a sense of lacking in willpower emerges as a justification. The correct approach is how we learnt swimming:  to play in the shallow water first overcoming the fear of drowning slowly, then gradually going deeper until we internalise the skill as a habit for life and we can then swim whether are ‘specifically motivated” or not

In Charles Duhigg’s bestselling book, The Power of Habit, he highlighted the 3 R’s of Habit Change. According to him every habit we have — good or bad — follows the same three–step pattern:

 

-          Reminder (the trigger that initiates the behaviour)

-          Routine (the behaviour itself; the action you take)

-          Reward (the benefit you gain from doing the behaviour)


Charles Duhigg’s “Habit Loop” in The Power of Habit

 

We often think about our life goals and get lost in the bigger than life pictures. We also think about the things as impossible that we can only achieve when the time is right or when we have better resources or when we finally catch our big opportunity.   We often we get obsessed with making dramatic transformations in our lives that we fail to focus on a few small lifestyle changes through the working habits.  Professor B J Fogg of Stanford University, said very succinctly explained the idea in these words:

 

If you plant the right seed in the right spot, it will grow without further coaxing. I believe this is the best metaphor for creating habits. The “right seed” is the tiny behaviour that you choose. The “right spot” is the sequencing — what it comes after. The “coaxing” part is amping up motivation, which I think has nothing to do with creating habits. In fact, focusing on motivation as the key to habits is exactly wrong. Let me be more explicit: If you pick the right small behaviour and

sequence it right, then you won’t have to motivate yourself to have it grow. It will just happen naturally, like a good seed planted in a good spot.

 

Small but powerful habits, if they are repeated, internalised and sustained can make our big dreams a reality. As it is said that dream big, but start small. Knowing how to make changes in our life style and develop good working habit is not enough, but we must include them as new goals into our life. It is obvious that making changes in our already hardened habits is a challenge, our internal inertia, a tendency to maintain status quo in life often deter us setting new life goals and take us back into your old habits. Using the strategies discussed briefly above will sure help you developing these highly successful working habits.

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NOTES:

(1)  Late Prof Md Fokhrul Islam (1939-1991) was born in Patherkandi, Dist Karimganj (Assam). He taught Economics at Cachar College, Silchar and later became the Principal of Lala Rural College, Hailakandi. In 1978 he was elected as an MLA from Patherkandi and later served as a Deputy Minister of Education. He was the Chairman of Assam State Madrassa Education Board for two consecutive terms.

(2)  Tahajjud (Arabic: تهجد‎‎), also known as the "night prayer", is a voluntary prayer performed by followers of Islam before dawn. It is not one of the five obligatory prayers required of all Muslims, although the Islamic prophet, Muhammad (PBUH) was recorded as performing the Tahajjud prayer regularly himself and encouraging his companions too (Wikipedia).