Islamic finance and charity in the Muslim world. The role of the Islamic Development Bank in financing aid

Abstract

The purpose of this paper is to describe the role of Islamic finance in the charitable sector by analysing how Islamic banks and States manage funds for humanitarian and development aid. The Islamic Development Bank (IsDB) represents one of the main Islamic actors involved in the development cooperation and humanitarian relief and, in partnership with other donors, it implements programs in its member countries. This research examines the existing literature and data regarding projects financed by the IsDB with the aim to understand the impact of Islamic financial tools on aid. The Lives and Livelihoods Fund (LLF) is an example of a program for poverty alleviation but also a mechanism of blended finance for supporting health, agriculture, and infrastructure projects. Financed by the IsDB, bilateral institutions, and foundations,it uses an innovative financing model aiming to produce sustainable growth in the most vulnerable member countries. It could represent a positive model for financing and implementing aid in a joint effort of Muslim and non-Muslim donors.

Islamic Economics for Sustainable Development

“…Islamic economics is a prominent component of the worldwide economic environment, especially in areas with substantial Muslim populations (Iskandar, 2018;Kuran, 2018). Gaining insight into the compatibility or synergy between Islamic economic principles and mainstream sustainability programs might promote increased inclusiveness and cooperation in tackling common concerns (Liu & Lai, 2021;Pericoli, 2020). Furthermore, conducting a review on Islamic economics for sustainable development might assist in identifying points of agreement and disagreement between Islamic economic principles and mainstream sustainability frameworks (Barom, 2018;Ghlamallah et al, 2021).…”

Praktik Keuangan Sosial Islam Di Negara Muslim

“…Bahkan, tampak bahwa studi-studi tertentu mengutuk partisipasi lembaga-lembaga Islam dalam inisiatif bantuan kemanusiaan. Salah satunya mengklaim bahwa beberapa negara terus mendapatkan bantuan dari kelompok donor diPericoli (2020). (dalam hal ini Bank Pembangunan Islam).…”