Islamic prof: takaful will lead to zakat bonanza

December 27, 2009

As Shariah Finance Watch has pointed out, Islamic insurance, or takaful, is on the rise, particularly in Iran and South Asia.

But if one Qatari scholar of Islamic law has his way, takaful will multiply in the Persian Gulf states as well.  This recent article from the Gulf Times points out that the number of Islamic insurance companies has increased from one to three in the past ten years, and Dr. al-Qaradaghi would like to see it increase much further.  The growth of Islamic insurance presents its own sharia finance problems, but what caught my eye was the zakat connection of the scholar’s sales pitch:

A leading industry expert has predicted a huge growth potential for Qatar’s Takaful (Islamic insurance) market, estimating its annual growth at 25%.

Dr Ali Mohayeddin al-Qaradaghi, a professor of Islamic jurisprudence at Qatar University, said that the local Islamic insurance market has lots of expansion opportunities since “every policy holders with the conventional insurance firms is willing to turn to the Takaful scheme”…

The scholar also estimated the annual Zakat that should be given by banks and companies listed in region’s stock markets at $100bn, which he said, can tackle the poverty problem in the world if invested in aid programmes.

“Based on a recent study I made, I calculated the value of the Zakat due by companies and banks in Gulf and other Islamic states can make $200bn. If this amount was properly invested through a ten-year plan to eradicate poverty, there would be no more poor people who starved to death around the world,” he added.

All right.  So that’s $200 billion in corporate zakat dollars due out “around the world.”  That sounds nice at first.  Until you listen to Ambassador Holbrooke, the U.S.’s special envoy to Afghanistan and Pakistan, who says that most of the Taliban’s revenue comes from zakat donations from Persian Gulf benefactors.  I feel no excitement about a new zakat tidal wave crashing down on the shores of an increasingly radicalized Islamic world.

One comment

  1. Muslim should aware about non Muslim comment about zakat. Zakat is potential to eradicate poverty but has been misused to finance radical organization??? Zakat is to be used for the goodness of people either Muslim and non Muslim. So those who use zakat to kill other people is really “not Islam”

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