IBF Net has embarked on a blockchain-based initiative to create a Relationship-Based Transactions (RBT) ecosystem under Digital IBF Lab, its newly created flagship.
Explaining the nature of Relationship Based Transactions (RBTs), the concept note prepared by IBF Net asserts that RBTs take place in all sectors of the economy – philanthropy, not-for-profit and for-profit – that are necessitated by recurring nature of client needs. RBTs through repeated interaction among the actors induces trust, commitment, loyalty and a long-term relationship between them.
At the same time, existing platforms that facilitate Islamic charity payments – zakat, sadaqah, cash waqf – usually provide for a one-time cash flow from the donor to the beneficiary. “Given that the donors motivated by a specific cause may like to observe the impact of their donation or see the project cross specific milestones in terms of output and outcome, there is need for an enhanced framework that permits multiple micro payments efficiently under a single precommitment”, says Mohammed Alim, CEO, IBF Net. “In addition to providing for the above framework, use of blockchain technology is expected to bring in its numerous other benefits, e.g. enhanced transparency, reduced cost of intermediation and an enhanced donor base (crypto-donors). From the standpoint of the agent (charity), the new framework should mitigate donor attrition risk. The notion of “feel the impact as you give” is expected to induce relationship-based donation and a longer-term bondage between the actors (donor, beneficiary and intermediary)”, according to Mohammed Naquib who heads the new initiative.
IBF Net will be developing of a unique product “RecurPay” on Tezos platform that will facilitate recurring and automated micro-payments and that brings the assurance of the Distributed Ledger Technology (DLT) platform to the area of micro charity for zakat, sadaqa, and cash-waqf with recurring and automated payments. Since available evidence suggests a renewed focus on the Islamic social finance sector, the project should open doors of trust, transparency, assurance, and security for its multiple stakeholders – the NGOs, charity organisations, and relevant government bodies across the globe.
The project, in its next phase is expected to shift its focus from philanthropy and benevolence to trade and commerce. Platforms that currently facilitate electronic trading in halal businesses usually accommodate traditional sale transactions in halal commodities and services with or without deferred payment facility. According to Dr Mohammed Obaidullah, who has extensively published on the subject, Shariah provides much greater flexibility with respect to the transaction related variables – price, quality and quantity of object of sale, terms of payment and delivery etc. – than what is commonly understood. IBF Net looks forward to developing the idea of relationship-based and recurring exchange transactions on a blockchain-based platform as part of its RBT ecosystem initiative.
The Concept Note on RBT Ecosystem may be downloaded from this link (https://ibfnet.my/lab/).
IBF Net (l) Limited is a leading education provider that was founded in 1999 as the maiden online community in the field. It was awarded the Global Excellence Award by International Islamic Finance Forum (IIFF) in 2007 for its pioneering initiative in developing the first ever suite of certification programs in Islamic banking, insurance and investments. Currently, it operates as a Labuan International Company with its corporate office in Kuala Lumpur.
IBF Net (L) Ltd has signed a Memorandum of Understanding with the Tashkent State University of Economics, Uzbekistan. The signing was led by Mohammed Alim, CEO of IBF Net and Prof. Kongiratboy Sharipov, Rector of TSUE.
This partnership will open doors of dialogue, exchange of ideas, and spearhead the rise of Islamic finance in Central Asia. IBF Net will bring in its cutting-edge certifications curated under the guidance of its industry experts through its think tank, the International Institute of Islamic Business and Finance (IIIBF) to open the doors to learning Islamic commercial as well as social finance. In partnership with TSUE, a leading university in Uzbekistan, IBF Net looks forward to the application of several of its Islamic fintech solutions for the halal ecosystem in Central Asia under its Digital-IBF-Lab initiative.
According to Prof Odiljon Komolov, Professor of Finance, TSUE, Uzbekistan looks forward to becoming a major hub of Islamic finance in the region and the partnership between the two institutions can make a major contribution in this regard by expanding the horizons of knowledge through research and capacity building. Prof Xaurulla Kurbanov who heads the Department of Finance at TSUE shares the optimism and will be coordinating all the partnership-related initiatives.
IBF Net has developed a unique Triple-IBF suite of qualifications for humanitarian and development professionals that include accredited certifications in Zakat Management, Waqf Management, Islamic Microfinance and Islamic Business and Financial Technologies. The team looks forward to launching two new exciting certifications that include, “Blockchains for Islamic Development” and “Artificial Intelligence for Islamic Finance” in the near future – says Mohammed Alim, CEO of IBF Net.
IBF Net is a leading education provider that was founded in 1999 as the maiden online community in the field. It was awarded the Global Excellence Award by International Islamic Finance Forum (IIFF) in 2007 for its pioneering initiative in developing the first ever suite of certification programs in Islamic banking, insurance and investments. Currently, it operates as a Labuan International Company with its corporate office in Kuala Lumpur.
Established in 1931, The Tashkent State University of Economics is one of the largest economic universities in Central Asia. Located in Tashkent, the capital of Uzbekistan, the university is a major attraction for aspiring economists and researchers from the region. It houses one of the largest university libraries in Central Asia and is a strong economic research hub.
Do zakat givers prefer to identify the beneficiaries by themselves and pay zakat to them? Or do they prefer to depend on intermediaries for fulfilling this important Shariah obligation? Given that some zakat givers use the services of intermediaries in varying degrees, what type of intermediaries are preferred over others? How has the Covid-19 pandemic affected the sentiments of zakat professionals as they strived to optimize their zakat collection during the last ten days of Ramadan this year? These and similar questions that must have crossed the minds of many observers of the zakat scene and stakeholders of the Islamic social finance sector.
From traditional methods to digital platforms, the Islamic social finance sector is witnessing a rapid increase in innovations and ideas to enhance zakat collection and distribution. In an attempt to find answers to these questions and strengthen the process of mainstreaming of the sector, IBF Net, an organization based in Kuala Lumpur launched a pair of surveys in collaboration with the Jakarta-based World Zakat Forum. The surveys were conducted in four international languages covering a large section of the global Muslim societies during the second half of Ramadhan 1441H with an aim to gauge and study zakat donors preferences as well as that of zakat professionals who are handling the zakat funds.
The results of the surveys (can be accessed at: iiibf.com/zakat-survey) throw up some interesting insights. Most zakat professionals expect a modest decline in zakat giving by businesses due to the impact of the pandemic. The impact on individual giving was less than clear-cut. While a large percentage of zakat givers use the services of intermediaries in varying degrees, the incidence of “self-management” is also significant indicating a possible “trust-deficit” among zakat givers towards intermediaries. It also raises the possibility of a gross understatement of reported data on zakat collections that focus on intermediaries alone. Among the intermediaries, zakat givers have a clear preference for Islamic NPOs. Most do not appear to be inclined at present to consider international development institutions and the latter have to strive to bridge the awareness and trust gap. Neither the givers nor the professionals displayed any age or gender related bias. Both groups however, displayed a strong affinity bias that is in conformity with the mandates of the Shariah.
Based on the surveys conducted, IBF Net feels that there is a serious need to collect and collate market intelligence, not just for the zakat sector or the Islamic social finance sector, but for the entire Islamic business and finance (IBF) sector, which are grossly under-researched currently from a marketing point of view. IBF Net has therefore embarked on an enhanced product – IBF Intelligence – that aims to recreate the IBF Network on a Blockchain’ to enhance data collection and curation in the industry. This service will help organisations to engage in ethical and authentic data collection conforming to the best of global practices and Islamic traditions. It will further enable existing and aspiring organizations in the halal ecosystem to take “evidence based” decisions based on insights from authentic survey responses. IBF Net is currently looking for technology partners for this program and invites interested individuals or organizations to connect.
Zakat is increasingly getting traction as a tool to fight poverty around the world. Major world bodies like UNICEF and UNHCR are taking a deep interest in Zakat as a solution to their problems. While poverty alleviation is among the objectives of the Islam, it is also the most prominent development goal in the Sustainable Development Goals (SDG) framework.
Managing zakat for alleviation of poverty, however, involves many challenges. A sustained flow of zakat funds demands high degrees of integrity, transparency and professionalism in the management of funds. The need for enhancing professionalism in Zakat management is being felt as never before.
IBF Net is a leading education provider that was awarded the Global Excellence Award by International Islamic Finance Forum (IIFF) in 2007. It is renowned for developing the first ever certification programs in Islamic banking, insurance and investment. IBF Net through its think tank, the International Institute of Islamic Business and Finance (IIIBF), which is led by industry experts has created a state-of-the-art certification to open the doors to learning the art and science of Zakat Management in a very accessible manner.
According to Mohammed Alim, CEO of IBF Net, the organization has brought in the best of the minds in the field to design this online course, which is perhaps the first of its kind in the world. Its International Advisory Board comprises known experts from the academia and the industry. The contents have been thoroughly reviewed and endorsed by the Shariah team of National Zakat Foundation, UK and the program is approved by the Finance Accreditation Agency of Malaysia. The course covers a wide range of topics and equips the student with the knowledge to mobilize, allocate, manage and distribute Zakat funds. The program is being offered in two languages – English and Bahasa Indonesia. A Turkish version of the program is expected to be launched next month.
As per Mohammad Zahid, an alumni of the maiden Zakat Management certification, “This certification is tailor made for anyone venturing into the field of Islamic social finance. It equipped me with the practical knowledge to mobilize, allocate, manage, and distribute Zakat funds which I could immediately implement in my professional life.”
For those interested in Fintech and new emerging technologies in the Halal industry, IBF Net is the place to be. Mohammed Imad, Director, Contents and Communications at IBF Net is upbeat about this Zakat program, which is a part of what he calls the Triple-IBF suite of qualifications for the development and humanitarian professionals in OIC member countries. The other programs that form part of the suite include certifications in Waqf Management, Islamic Microfinance and Islamic Business and Financial Technologies. A foundational program in Islamic Financial Services covers the building blocks for the intermediate level programs. “Come Autumn, we should be ready with two ambitious certifications in “Blockchains for Islamic Development” and “Artificial Intelligence for Islamic Finance”, he says.
For more details about the course, visit: www.iiibf.com/product/certified-zakat- professional
IBF Net stands for the Islamic Business and Finance Network. IBF Net is the maiden onlinecommunity in the field created in 1999. The network is owned by IBF Net (L) Limited – a Labuan International Company now with its registered office in the Federal Territory of Labuan and corporate office in Kuala Lumpur, Malaysia. It was founded by Dr Mohammed Obaidullah, a known Islamic social finance expert.