Islamic financing organizations hold strategic planning

In a bid to improve their services in alleviating the economic status of their target Bangsamoro communities through Shariah-compliant microfinancing, five Bangsamoro groups engaged in Islamic financing held a strategic planning workshop at Sunrise Garden Resort in Lake Sebu, South Cotabato on May 17-18, 2016.

The organizations were Katiyakap, Inc., Kadtabanga Foundation, Ammanah Cooperative, Al-Wataniya, and Tasbika. These groups were assisted by the Peace and Equity Foundation (PEF) which provided the funding support to initiate microfinancing to target poor Bangsamoro households in Mindanao.

The PEF, which believes that microfinancing that is adherent to Islamic jurisprudence is a tool that will help alleviate the Bangsamoro people from poverty, tapped Katiyakap in 2012 and Kadtabanga in 2014 to test if Islamic financing would work out.

 “We invest, trying to assist you achieve your organizational goals to help in poverty alleviation among the Bangsamoro communities,” Ricardo Torres, PEF Deputy Executive Director told the participants.

Torres related that the PEF recognizes the sensitivity the Muslims on the financing schemes which consider interest as Haram (forbidden), thus their foundation studied Islamic financing and piloted it to test its viability.

The organizations reviewed their implementation process and shared their strategies and experiences in carrying out the economic intervention initiative which was their basis to craft a 30-month operational plan starting June 2016.

They reported their accomplishments and experiences in their project implementations and how the financing assistance helped provide additional income to their clients.

Shariah-compliant financing has been proven effective in other countries in alleviating poverty among Muslims households.

The participating organizations adopted Murabaha (cost plus), Mudharaba (profit-sharing), and Ijara (rental) which are the common financing structures adherent to Shariah in their services.

Before providing the funds, they require their clients to undergo orientation on Islamic Values and Islamic financing. They also require the borrowers to declare their collaterals.

The participants expressed hope that their respective organizations will grow so that more poor Bangsamoro families will be served. 

They also look forward that the government will help Islamic banking and finance to flourish in the country in order to help the Bangsamoro people attain their economic stability.