25 July 2022, Sumatra – Islamic Economics and Finance (IEF) must integrate its framework within the Maqasid Al Shariah, says INCEIF University President & CEO Prof Dato’ Dr Azmi Omar.
“In the next decade, IEF should move beyond the micro perspective of the Fiqh approach of mere Halal and Haram, and embrace the macro perspective of Toyyib where the emphasis is on the outcome through an impact driven approach,” Dato’ Azmi said in his Keynote Address at the International Conference on Islamic Economics and Social Finance organised by IAIN Padangsidimpuan, a State university specialising in Islamic Studies located in Padangsidimpuan in North Sumatra.
Themed ‘Strengthening Islamic Economic Financial Digitalisation and Sustainability’, the conference was attended by the Mayor of Padangsidimpuan, Mr Irsan Efendi Nasution.
The early years of Islamic banking were focused on providing alternative Shariah compliant solutions to Muslims where the products were mainly targeted to individuals for mortgage, automobile and personal financing. Typically known as consumption finance, the Islamic financial contracts then comprised Murabaha, Ijarah, Salam, Istisna’, Musharakah and Mudarabah.
Today, the challenges faced by IEF included the income & wealth inequality, financial inclusion, sustainability & climate change and digitalisation.
Dato’ Azmi said IEF must transition from merely providing alternative Shariah compliant solutions to solutions based on fulfilling the objectives of Shariah by incorporating five components:
- Preservation of religion,
- Preservation of intellect,
- Preservation of property/wealth,
- Preservation of life and
- Preservation of progeny/lineage
He urged scholars, industry players and other stakeholders of IEF to consider studying and applying the Maqasid Al Khassah, which is the specific Maqasid based on Muamalat as proposed by Scholar Ibn Ashur, as the future framework for IEF. This will enable IEF to successfully incorporate the ethos of sustainability in its goals and practice such as value-based banking, SRI & Green sukuk, and ESG & Impact Investment Funds.