Tanzania featured in IRTI Islamic Social Finance Report 2015

Today, IRTI released the report during a conference on "Awqaf, Zakah and Ethical Microfinance as tools for Empowerment", organised by the South African National Zakah Fund (SANZAF) in Pretoria, South Africa.

This edition of the ISFR focuses on the Sub-Saharan Africa, outlining the regional trends and prospects as well as proposing policy recommendations for the Islamic social finance sector, which includes Zakat, Waqf and Islamic microfinance.

It analysed the regulatory environments and practices in six selected countries, namely Sudan, Nigeria, Kenya, Mauritius, South Africa and Tanzania.

Findings show that Sudan, Nigeria and South Africa can easily generate adequate resources for poverty alleviation through Zakat, while Islamic social finance also has great potential for curbing poverty in the three other countries studied.

The report estimates the annual Zakat potential in Sudan, Nigeria and South Africa at about $1,843.51 million, $8,776.45 million and $178.87 million respectively. However, the actual collection in 2013 was $220 million, $3 million and $100 million respectively.

Key recommendations include enhancing the legal frameworks for Islamic social finance; institutionalizing zakah collection and distribution; offering unique microfinance products for smallholder farmers; and allowing waqf creation by non-Muslims.

The report notes that collection of in-kind Zakat from locations like farms comes with high costs, and therefore recommends a review of the cap on operational costs, given the predominance of agriculture in the countries studied.

Findings further show that while compulsory Zakat remittances obviously boost collection levels, as in Sudan, such policy has not been successful in parts of Nigeria because of lack of enforcement mechanism. Incentives in the form of tax rebates for Zakat payments have also helped in Sudan.

In his comments on the report, IRTI Director General Prof. Mohamed Azmi Omar said, "By focusing on Sub-Saharan Africa, we hope that this issue of the ISFR will satisfy a long-felt need for adequate and relevant information that will help towards instituting an enabling environment for the Islamic social finance sector in the region."

IRTI instituted the ISFR series last year with the aim of providing relevant data and policy roadmaps that could assist the campaign to end poverty in all its forms globally.

The maiden edition focused on South Asian and South East Asian countries, including Indonesia, Malaysia, Singapore, Brunei Darussalam, India, Pakistan and Bangladesh. Subsequent editions will study other regions, the IRTI Director General said.

End.

In sha Allah, I shall bring to you specific details on Tanzania once i get the full report.