عربي
Home


Articles

Articles

The Impact of COVID-19 Pandemic on Islamic Finance According to the Dinar Standard Report 2021/2022
Author : Dr. Safwan Odaybat
Date Added : 11-09-2022

The Impact of COVID-19 Pandemic on Islamic Finance According to the Dinar Standard Report 2021/2022

 

COVID-19 pandemic had an evident impact on the economic, social, and political sectors of life. The Islamic finance sector is a key contributor to economic life worldwide, given its development and incremental aspects of growth in recent years.

Amongst the most important and precise technical studies indicating the impact of the COVID-19 pandemic on Islamic finance (2021/2022) in numbers is the report prepared by Dinar Standard in partnership with Salam Gateway with the support of DIEDC. This report was published by the International Islamic Center for Reconciliation and Arbitration (IICRA) in Dubai, Edition No. (19), 4rth quarter, 1443 H/June 2022.

The key points of this report are:

First: The value of Islamic finance assets in 2019 has risen from 2.52 trillion US dollars to 2.88 trillion US dollars amounting to 13.9%. The report expected this sector to recover over the coming five years with an overall growth by 5%.

Second: The rapid growth of the Islamic Takaful insurance, especially in the Gulf countries and Indonesia.

Third: 2020 witnessed a large number of initiatives and measures that help enhance the growth of Islamic finance, particularly in the countries of the Organization of Islamic Cooperation. In addition, it was decided to establish new Islamic banks in countries such as Tajikistan, Uganda and the Philippines, in addition to digital banks in Kazakhstan and Malaysia.

Fourth: The investment of Islamic Financial Technology as well as the combination Islamic financial institutions through out possession and combination that reached 4.93bn. in 2019 to 2020.

Fifth: The activity of the Islamic Sukuk decreased but didn`t stop where it was announced that new Sukuk were issued in south Africa, Nigeria, Britain, Gulf and south east Asia countries.

Sixth: Developing the sector of social finance through collective funding, fostering partnerships between the private and public sectors or supporting small and medium-sized finance institutions. 

Based on the above notes, the following can be noticed:

  1. Despite the fact that the report was prepared during the COVID-19 pandemic, Islamic finance has witnessed an evident growth and recovery is expected in the coming years. In the same year of preparing this report, the number of the Islamic finance institutions has reached 1462.
  2. Adopting social finance that rests on Takaful and cooperation between people to ease their problems, as is the case with Zakah (Alms giving) and Sadqah (Voluntary charity) and providing financial support to small and medium-sized financial institutions. Moreover, partnership between the private and public sectors is an example of this form of finance. New platforms have been established for collective funding between counterparts in Britain and Malaysia, and an initiative was launched to benefit from social Islamic finance in the UN in partnership with the Islamic Bank for Development in 2021 (news.UN.org).
  3. The COVID-19 pandemic encouraged Islamic finance to develop financial technology through modern electronic platforms, digital banks, and distinguished services of digital banking.
  4. Islami Sukuk have witnessed a remarkable growth within the recent years. As indicated by the report, this product hasn`t stopped despite the impact of the COVID-19 pandemic where their issuance was resumed in several countries. Here, it is worth pointing that later in the year 2021, the fourth issuance of the Sukuk for the Murabah to the purchase orderer were issued in favor of the Jordan National Electricity Company to fund the energy sector with a total value of 225 million JDs by an annual Murabaha percentage of 3.55% over five years.

Unequivocally, these notes indicate that the Islamic finance sector is replete with Sharia, technical, and legal competencies enabling it to face difficult situations, such as COVID-19 pandemic to create an opportunity to keep abreast with developments, innovate new products to address the needs of the people, and continue Islamic finance services.  

 

The published article reflects the opinion of its author

Article Number [ Previous | Next ]

Read for Author




Comments


Captcha


Warning: this window is not dedicated to receive religious questions, but to comment on topics published for the benefit of the site administrators—and not for publication. We are pleased to receive religious questions in the section "Send Your Question". So we apologize to readers for not answering any questions through this window of "Comments" for the sake of work organization. Thank you.




Summarized Fatawaa

My brother works in a conventional bank and gave me one of the gifts distributed to bank employees — what is the ruling on accepting it?

All praise is due to Allah, and peace and blessings be upon our master the Messenger of Allah ﷺ.
There is no objection to accepting such gifts, because the physical gift itself does not carry any inherent prohibition — unlike stolen property. Sin does not transfer or extend to the one who receives the gift, for Allah the Almighty says {what means}: "And no bearer of burdens shall bear the burden of another." [Al-Anʿām/164]
The evidence for this is that the Prophet ﷺ himself ate from the food of the Jews, conducted transactions with them, and purchased from them — and it is well known that their wealth was intermingled with ribā. Similarly, the wealth of conventional ribā-based banks is a mixture of the lawful and the unlawful.
Ibn Ḥajar al-Haytamī, may Allah have mercy upon him, states: "It is not forbidden to transact with one whose wealth is predominantly unlawful, nor to eat from it — as al-Nawawī affirmed in al-Majmūʿ." [Tuḥfat al-Muḥtāj, Vol. 9/P.389] And Allah the Almighty knows best.

What is the ruling on praying seated due to severe obesity, given that I experience hardship in performing the prayer — especially when rising from the ground after sujūd to perform the next rak‘ah?

All praise is due to Allah, and peace and blessings be upon our master, the Messenger of Allah ﷺ.
Standing, when one is able to do so, is a pillar of the prayer. However, whoever would experience severe, intolerable hardship, or fears harm to himself or to a limb due to obesity, or finds that standing causes him to lose his khushū‘ (humble focus and concentration) in prayer, then there is no objection to his praying seated on a chair or on the ground, performing rukū‘ (bowing) and sujūd (prostration) through gesture — provided that the gesture for sujūd is made lower than that for rukū‘. Whoever is able, at any point, to properly perform any one of these pillars, is obligated to perform it in full; for omitting it is a concession that applies only in cases of genuine inability. The Prophet ﷺ said: "When I command you to do something, do of it whatever you are able." (Related by al-Bukhārī). As the scholars of fiqh have established: what remains possible is not waived on account of what is difficult.
The criterion for determining genuine inability, as chosen by Imam al-Ḥaramayn al-Juwaynī (raḥimahullāh), is that the worshipper experiences hardship that causes him to lose his khushū‘.
As for voluntary (nafl) prayer, there is no objection to performing it while seated, even if one is able to stand. However, rukū‘ and sujūd must still be performed [in their proper physical form] by anyone who is able to do so. And Allah, the Exalted, knows best.

What is the ruling of Islamic Law on someone who wakes up in a state of janābah (major ritual impurity) near the very end of the prayer's designated time, during cold weather — should he heat water in order to perform ghusl, even though the prayer's time will expire as a result, or should he perform tayammum instead?

All praise is due to Allah, and peace and blessings be upon our master, the Messenger of Allah ﷺ.
If the water is cold, and cannot be used due to fear of harm that is not ordinarily tolerable, or that would result in illness, then in this case it becomes obligatory to heat the water — even if heating it causes the time for Fajr to expire — and no sin is incurred in doing so, due to his valid excuse. He may not resort to tayammum (dry ablution) instead, since water remains available [and merely needs to be heated].
Imam Shihāb ad-Dīn Aḥmad ar-Ramlī (raḥimahullāh) said: "He was asked regarding a person who, if he were to use cold water, would experience harm that permits tayammum, and who has access to something with which he could heat the water — but if he heats it, the prayer's time will expire. Is it obligatory for him to heat it even if the time expires, or should he pray with tayammum within the prescribed time? He answered that it is obligatory for him to heat the water, even if the time for that particular obligatory prayer expires." [Fatāwā ar-Ramlī, Vol.1/P.98]
Imam al-Bājūrī (raḥimahullāh) said in his Ḥāshiyah on Sharḥ Ibn Qāsim (Vol.1/P.173): "And if he fears [harm] from using cold water, and is currently unable to heat it, but knows of a place where firewood is available, such that if he were to go there he would not return until after the prescribed time has expired — what appears [to be the correct position] is that it is obligatory for him to go and seek the firewood, even if the time expires as a result, as this is the position ultimately settled upon by ar-Ramlī, and as related from him by Ibn Qāsim." And Allah, the Exalted, knows best.

What does "All the deeds of the son of Adam are for him, except fasting" mean?

The Prophet ﷺ said: "Allah, the Almighty, said: 'Every deed of the son of Adam is for him, except for fasting; it is for Me, and I shall reward for it." [Agreed upon]
This means:
● Every deed of the son of Adam may be affected by showing off (riyaa’), except fasting, because only Allah knows whether a person is truly fasting or not.
● The reward for all deeds is known—one good deed is multiplied tenfold—except fasting, as only Allah knows its true reward.

See More