Monday, February 13, 2012

Social/welfare institutions: Need for a re-think?

Assalamualaikum (Peace be upon you),

The recent article in Borneo Bulletin on the indebted plight of single mothers reminds me of some of the interviews I had recently with zakat recipients. It reinforces my view that social institutions that involves giving out financial support to others, needs to re-think the way they look at personal finance in a world where governments are pushing individuals to be more financially dependent and literate, such as the pension issue that faces numerous countries and individuals.

At the very least, when creating financial solutions for the poor, there is a need to be more thorough and further consideration on the costs of individuals facing hardship. Between those who have and have-not, $1 is valued differently.

Without criticizing these institutions, the emphasis should be to creatively come up with better, innovative ways on how, from a personal financial view, that these social institutions can evolve forward. The relative success of microfinance from the early days of Grameen bank in Bangladesh is interesting, though the issue of interest or riba prevails. Can we come up with better way to help improve the situation of the poor, without interest? Can we create a comprehensive and inclusive financial solution that is fair for all concerned?

My thoughts.

Take care,
Umar

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