Islamic Economics Program Holds Public Seminar Discussing Urgency of the Inclusive Islamic Finance For Development

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Public seminar participants of Inclusive Islamic Finance For Development with the Director of Bank Indonesia and Prof. M. Kabir Hassan from University of New Orleans, USA at Fadjar Notonegoro Hall, UNAIR Faculty of Economics and Business on Friday, December 14. (Photo: By courtesy)

UNAIR NEWS – Being held at Fadjar Notonegoro Hall of Faculty of Economics and Business UNAIR, the International Shari’a Economic Festival (ISEF) 2018 was held on Friday, December 14. It is an annual event organized by Department of Islamic Economics, Universitas Airlangga in collaboration with Bank Indonesia.

Not only the Director of Bank Indonesia, this year ISEF had the opportunity to invite Prof. M. Kabir Hassan from the University of New Orleans, USA as the keynote speakers. In the guest lecture which was held for the first time in UNAIR, ISEF raised the theme of Inclusive Islamic Finance For Development.

The professor from the USA (United States of America) said that financial inclusion is the key to accelerating economic growth. About 2.7 billion people in emerging markets still do not have access to basic financial services.

Most of them, continued Prof. Kabir, are from countries with Muslim majority population. High cost associated with credit assessment and financial monitoring are also problems.

Furthermore, the expansion of access to finance and financial services to facilitate sustainable growth and productivity such as credit availability, mobilization of savings, insurance, and management risk are also factors that influence a country’s growth. Seeing that, said Prof. Kabir, financial inclusion refers to the provision of financial services that focus on low-income people at affordable costs.

For example, in an imperfect financial market, low-income community cannot save after harvest or lend money to survive. In Islamic teachings, a rule-based system in which a network of rules is determined governs the socio-economic-political life of the community.

Compliance to these rules, said Prof Kabir, makes society an element that unites and supports reciprocity requiring humans to share the risks of life. Islamic financial instruments enable the sharing of risk and diversification of risk through each individual who can reduce the risk of the burden of life of each other.

Zakat and waqaf are things that can be integrated into Islamic inclusive finance to solve the problem of outreach and sustainability. In every low income community, Islamic rules are not observed. Therefore, there is a need for Islamic-based financial inclusion.

“In Islamic teachings and community who obey Allah’s rules believe that absolute poverty cannot exist,” concluded Prof. Kabir. (*)


Author: Wiwik Yuni Eryanti Ningrum

Editor: Feri Fenoria

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