Al Rayan Bank Partners with Islamic Relief
This month Al Rayan Bank announced its exclusive charity partnership with Islamic Relief, one of the world’s largest Islamic faith-based Non-Governmental Organisations (NGOs).
We’re teaming up to support Sharia compliant microfinance through fundraising activities,which will empower people to establish social enterprise businesses in their home countries and work their way out of poverty. This is part of Islamic Relief’s ‘Sustainable Livelihoods’ programme.
Microfinance, where entrepreneurs in developing countries are given access to financial services that would otherwise be unavailable to them, is recognised as a key strategy to help those living in poverty to become financially independent. Islamic microfinance is designed to cater for poor people in predominantly Muslim countries.
One microfinance project Al Rayan Bank will be supporting is in the Republic of Mali, West Africa. The project has empowered local women, providing them with an opportunity to build a better life for themselves and their families. Money is made available through Sharia compliant ‘Qard Hasan loans’ (loan without benefit). The women will use this money to commercially harvest the nut of the African Shea tree and create ‘Shea butter’, which can then be used in various cosmetic products.
Al Rayan Bank will be supporting the project through fundraising activities and providing the skills of our staff on a voluntary basis. They can aid the project in many ways, such as helping to develop the Islamic finance literacy of the community members, and ensuring that they are using sound financing models.
Our CEO, Sultan Choudhury, said of the microfinance project, “Islamic banking is a socially responsible form of banking, which is concerned with the effect of its activities on society as a whole. We are therefore very pleased to be partnering with Islamic Relief and supporting the Mali Shea Butter project.”
In Mali, the microfinance sector is not consistently regulated unlike elsewhere in the developing world. Al Rayan Bank and Islamic Relief have made it possible for the local community to organise themselves into self-help groups or co-operatives (the “village bank”) that mobilise capital through savings deposits from its members and then in turn provide loans that do not include interest.
Seema Khan, Head of Major Gifts at Islamic Relief UK, said: “Inequalities in global wealth distribution mean that innovative approaches are needed to achieve change. Our partnership with Al Rayan Bank will help us to enable communities to become self-sufficient and independent.”