Tag Archives: Islamic finance

Forthcoming Publication: “Muslim and Debt”

muslimanddebt2

As a sequel to “MUSLIM COUPLE AND MONEY: 8 PRACTICAL FINANCIAL TIPS FOR NEWLYWED MUSLIM COUPLE,” the following book will soon be published, insha’ Allah:
 
“MUSLIM AND DEBT: 5 PRACTICAL STEPS TO FREEDOM FROM DEBT” (MuslimandMoney.com, 2016, US$2.99)
 

Muslim Couple and Money

Muslim Couple and Money: 8 Practical Financial Tips for Newlywed Muslim Couple

FORTHCOMING PUBLICATION

Mansoor Limba, MUSLIM COUPLE AND MONEY: 8 PRACTICAL FINANCIAL TIPS FOR NEWLYWED MUSLIM COUPLE (MuslimandMoney.com, 2016).

The book will be published next month (September 2016), insha’ Allah, through both Amazon.com and Smashwords.com platforms.

It is currently available as pre-release and sample pages can be downloaded free at Smashwords.com.

This title is part of the Muslim and Money Book Series. The other titles are “Muslim Kid and Money: 12 Financial Stories for Muslim Children” and “Muslim and Debt: 5 Practical Steps to Freedom from Debt.”

 

 

On the Banking System and Financial Literacy in Mindanao

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MAKATI CITY (8 May) – As a financial literacy advocate and blogger, I was quite privileged to be invited last Friday (May 6) in the first forum on “The Flow of Deposits in the Mindanao Banking System: Exploring Alternatives” hosted by the Joint Ateneo Institute of Mindanao Economics (JAIME) held in Ateneo de Davao University, Davao City.

Covered by the British Broadcasting Corporation (BBC), the forum was attended by representatives from the Tokyo University, Department of Trade and Industry (DTI) – Region 11 Office, Mindanao Development Agency (MinDA), Mindanao Business Council, Landbank of the Philippines, Union Bank, Banco de Oro (BDO), Development Bank of the Philippines (DBP), Philippine National Bank (PNB), MMC, Davao City Chamber of Commerce and Industry, Ateneo de Manila University, Xavier University, various offices of Ateneo de Davao University (Academic Vice President Office, University Research Council, Finance Office, Al Qalam Institute for Islamic Identities and Dialogue in Southeast Asia, School of Business and Governance, and the Economics Department), rural banks, and microfinance institutions, among others.

Focused mainly on the constituents of Mindanao’s dualistic banking system, viz. (1) branches of the universal and commercial banks (UCBs) with head offices in the National Capital Region (NCR) and (2) branches and head offices of the locally-oriented thrift banks and rural and cooperative banks (TB-RCBs), the research presentation by JAIME Director, Dr. Germelino M. Bautista, attempted to answer the following questions:

(1) What is the overall performance of the dualistic banking system in Mindanao, and what are its trajectories?

(2) How different are the deposit mobilization capacities and loan provisioning roles of these banks and what do these differences imply for the banking system and economic development of Mindanao?

(3) What options are available to address the limitations in capacities and roles of the UCBs and TB-RCBs?

As Prof. Bautista argued, a vision or alternative future for the TB-RCBs of Mindanao might entail the following conditions:

(3.1) Improve the capacities of existing TB-RCBs, strengthen their local community orientations, and determine what can further promote the growth of rural and cooperative banks;

(3.2) Tap the currently underserved and unbanked population, and further expand the community-based microfinance operations of TB-RCBs to promote the livelihood of the self-employed and small businesses and eventually generate and mobilize savings from new client depositors;

(3.3) Establish more Islamic finance intermediaries and apply shari‘ah financial instruments that aim to generate higher incomes and mobilize savings in poor Muslim communities; and

(3.4) Mobilize deposits from both Muslim and non-Muslim cooperatives for their own rural cooperative and Islamic banks.

In the Q & A session, the following points came to the fore:

* There has been available money for loan in the banks and microfinance institutions, but the usual problem has been the failure of most borrowers to repay their respective loans.

* The local government units (LGUs) could do a lot in improving the flow of deposits in the banking system.

* Any success in encouraging the potential depositors to deposit their money to a commercial bank or a rural bank, as the case may be, is also reflective of our success in encouraging them to develop the habit of saving and later on, investing, as well as to cultivate their entrepreneurial mindset. In other words, financial literacy of the individual – the potential depositor and loan applicant – is a preliminary step in banking.

* There is considerable interest in knowing more about shari‘ah-compliant instruments for generating higher incomes and mobilizing savings.

As such, these points could be viable candidates as the next research agenda of the nascent Joint Ateneo Institute of Mindanao Economics or JAIME.

Hadith on Earning a Livelihood

Hadith on Earning a Livelihood

“He who tolerates the task of earning money for [the comfort of] his wife is like the one who fights in the way of Allah.”

(Man La Yahduruh al-Faqih, vol. 3, p. 168)

Islamic Business Ethics in a Nutshell

Islamic Business Ethics

It is sometimes said that “business ethics” is an oxymoron. How can one do business and still be an ethical person? Isn’t business all about self-interest, greed and making exuberant profits?

Yes, it is true that the physical, earthly dimension of a human is based on two main characteristics: greed and anger. The former attracts whatever it perceives to be beneficial and the latter repels whatever it perceives to be harmful.

But the spiritual, heavenly dimension consists of mind and conscience which have the potential of controlling the elements of greed and anger. One whose spiritual powers control the physical powers is indeed an ethical person; and one who lives life only by the elements of anger and greed has not actualized the potential of soaring from the worldly level to the heavenly level.

Adding the adjective “Islamic” to “business ethics” might surprise some. But one has to realize that Islam is more than just a religion in the spiritual sense of the word; it is a way of life. Even the secular aspects of life are greatly influenced by spiritual values.

There is no difference between the sphere of worship and the sphere of business; Islamic laws govern the family life of Muslims well as their social conduct.

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The foundation of Islamic business ethics depends on delineating the purpose of human life. When Adam and Eve as well as the Satan were sent down to the earth, Almighty God declared:

“All of you get down from the Garden to the earth, some of you being the enemies of the others, and there is on the earth your abode and the necessities of life for a fixed period of time.” (The Qur’an 2:36)

“All of you get down from the Garden. Once you are on the earth, the guidance will certainly come to you from Me, and then whoever follows My guidance there will be no fear for them nor shall they grieve. But those who do not follow My guidance, who disbelieve and reject Our revelation, they are the inmates of the Fire, in it they shall abide”. (2:38-39)

The Qur’an further tells us that this earth and its surrounding atmosphere have the resources for us to sustain our lives on it:

“Allah is He who created the heavens and the earth, and send down the water from the sky with which He brought forth fruits as sustenance for you. He made the ships subservient to you so that they may flow in the sea with His command. He (also) made the rivers subservient to you, and He made the sun and the moon-which are persistent (upon their course) – subservient to you, and He made the night and the day subservient to you. (In short,) He gave you all that you asked Him. If you count Allah’s blessings, (they are so many that) you will never be able to number them – (but still) the human is very unjust (and) very ungrateful!” (14: 32-34)

These verses clearly state the followings:

• This earth is our abode.

• This earth and its surrounding atmosphere have the resources to sustain our lives on it.

• Divine guidance will come to us and we are expected to follow it.

• Satan is our enemy and will try his best to misguide us.

• The life on this earth is for a fixed time only.

• The hereafter is the final destination. Whether the final destination will be blissful or painful depends on whether or not we follow the divine guidance.

So a human being is a creation of God, a citizen of this earth, surviving by wisely using its natural resources alone or with the, cooperation of fellow humans. Human interaction may be pictured as following:

Your Relationship with God, Earth & Others

As a creation of God, a human being is expected to obey the Divine commandments in relation to the self, to fellow humans, and also towards the earth. We cannot forget the satanic temptations that overwhelm many people.

This three-way interaction defines the perimeter of Islamic ethics in the business sphere. The guiding principles in these interactions are:

1. Obeying the Divine commandments. (2:38 above)

2. Dealing with others on the basis of justice and fairness. “O you who believe! Be upright for the sake of Allah, in testifying for fairness: and do not let the hatred of a people urge you to be unjust, be just (since) that is closer to piety. Fear (from displeasing) Allah, verily Allah is Aware of what you do.” (5:8)

3. Being moderate in one’s personal life and in the use of natural resources.“O you who believe! Neither forbid the (use of) good (things) that Allah has allowed for you nor exceed the limits because Allah does not love those who exceed the limits.” (5:87)

(Source: Sayyid Muhammad Rizvi, ISLAMIC BUSINESS ETHICS (Canada: Al-Ma’arif Books, 2006), pp. 5-8.)

M&M Question and Answer #2

M&MQ&A02

Q) What are the conditions of a Seller and a Buyer?

A) There are six conditions for the Sellers and Buyers:

1) They should be Baligh (reached the age of puberty).
2) They should be sane.
3) They should not be impudent, that is, they should be squandering their wealth.
4) They should have a serious and genuine intention to sell and purchase a commodity.
5) They have not been forced to sell and buy.
6) They should be the rightful owners of the commodity which they wish to sell.

Source: “Islamic Law: Raising Awareness on Fiqh and Ulamaa

Qur’anic Paradigm of Personal Finance

Qur'anic Paradigm of Personal Finance

“By the means of what Allah has given you, seek the abode of the Hereafter, while not forgetting your share of this world. Be good [to others] just as Allah has been good to you, and do not try to cause corruption in the land. Indeed Allah does not like the agents of corruption.” (Qur’an 28:77)

Elements of the Qur’anic Paradigm of Personal Finance:

1. Seeking the abode of the Hereafter as the primary goal in life;

2. Utilizing all the means provided by God for the pursuit of that goal while not forgetting one’s share of this world;

3. Rendering service to fellow creatures;

4. Avoiding the transgression of bounds or “causing corruption in the land.”

Longest Verse of the Qur’an

Longest Verse of the Qur'an

The longest verse (ayah) of the Qur’an is not about ritual prayer (salah) or fasting (sawm); neither is it about Hajj pilgrimage or jihad.

It is about contracting a loan and dealing with money matters.

What muslimandmoney.com is NOT?

What muslimandmoney.com is NOT

Salamun ‘alaykum!

MUSLIMANDMONEY.COM is a platform for Muslim’s guide to personal finance, investment and entrepreneurship.

MUSLIMANDMONEY.COM is NOT a quick-rich scheme. It is NOT a magic formula of wealth. It is NOT a scam.

It is NOT a dialogue between two equals (Muslim and money). It is rather a forum to declare the former’s mastership and the latter’s servanthood, and not the other way around.

It is NOT about greed. It is NOT about materialism. It is NOT even about money per se.

It is about planning and action. It is about attitude and management. It is about prayer and productivity. It is about acquiring streams of lawful income. It is about self-esteem and financial freedom. It is about spiritual-physical equilibrium. It is about self-empowerment to empower others.