Author: In Am Nabila Binti Mohd Hashim
What is finance?
Finance involves the allocation of financial resources such as assets and liabilities and the conditions of risk and uncertainty over space and time for better returns. Therefore, finance is about the management of the flow of money from the surplus spending unit of the economy to the deficit units of the economy. It involves activities such as investment, lending, borrowing, saving, and forecasting conventional finance has created a lot of benefits and advantages to the capitalist group and it has been associated with widening income gap. In this society one of the reasons of this is due to most of financial institutions are profit-oriented institutions and the institutions are based on interest system.
Lately, there is an emerging term called social finance.
What is social finance?
In short, social finance involves the allocation of financial resources such as assets and liabilities under conditions of risk and uncertainty over space and time for positive results outcomes to the society and the environment. Often, we would hear the objectives of social finance are for planet people and profit or the triple peace.
Another interesting development in the financial market is about the emergence of Islamic Social Finance.
So, what is Islamic Social Finance?
Islamic Social Finance involves the sharia-compliant management and allocation of financial resources again involving asset and liabilities under conditions of risk and uncertainty over space and time for realising the Maqasid Shari’ah (objective of Shari’ah) Maqasid Shariah are concerns the protection of human, faith, life, wealth, progeny and intellect. In shot the objective of sharia is to promote benefits to the people and planet and to prevent evil and mischief from spreading in this world.
When we say Islamic Social Finance, the interesting thing is that it moved away from the profit-oriented concept of Islamic Finance. At the moment, most of the discussions under Islamic Social Finance involves institutions of Zakat and Waqf. Especially the ones mobilizing technology to harness the large potential of these two instruments. Among these institutions, Finterra is a technology-based company that mobilises blockchain technology in the waqf sector. More about this in https://mywaqf.com/.