Academic institutions conduct study to help Islamic microfinance practitioners 

With their aim to help in the economic development of Mindanao, Al Qalam Institute and the Joint Ateneo Institute for Mindanao Economics (JAIME) is currently studying the practice of Shari’ah-compliant micro-finance.

The primary goal of the study is to define further how the academe can help in supporting the institutions engaged in micro-finance that is allowed in Islam considering that micro-financing could play an important role in increasing the household income of the Muslim community members.

The team, headed by Dr. Germelino Bautista from Ateneo de Manila University, has been interviewing the Moro NGOs which are currently engaged in providing needy Muslim beneficiaries the access to small capitalization for livelihood activities that complies with Shari’ah.

There are very few organizations in Mindanao that offer Shari’ah-compliant micro-finance. Among those are the Kadtabanga Foundation based in Cotabato and Katiyakap in General Santos City.

“We want to learn the development of your micro-finance, your history and the challenges you encountered,” Bautista told the respondents during the interview.

The officers of Katiyakap related how they shifted their focus from peace advocacy to micro-financing knowing there are many Moro people belonging to the poverty line who need help.

“However, we try to avoid clients who has the ‘dole out’ mentality or those who are not willing to repay in their assumption that projects are grants or dole outs from the donors that do not need repayment,” said Yolanda Nawal, Katiyakap Executive Director.

Katiyakap accessed financial assistance from the Peace and Equity Foundation, an institution that provides financial assistance to cooperatives or organizations that engage in micro-finance to help develop communities.

Its micro-finance project provides small capital for livelihood activities of poor Muslim women. 

Wahida Abtahi, President of Katiyakap, is optimistic that other development stakeholders will come in to help develop Islamic financing in Mindanao and that the government will pass a law that will allow investors to put up Islamic banks in the country.

She also cited the important role of the Ulama in educating the public about Islamic financing and guiding financing institution that will offer Shari-ah financing in the future.

With the assistance of PEF and Al Qalam, Katiyakap hosted the consultation of Ulama last November where the Muslim religious leaders expressed their desire to help develop Islamic financing in the country.

The participants formed the Islamic Economic Forum of the Philippines that will undertake initiatives on Islamic financing.

“We need to help strengthen the Ulama group which was recently organized. With their capabilities and being the source of knowledge on Islamic financing, they can be of big help,” Abtahi said.