KARACHI: Islamic banking can play a key role to address the four major challenges of poverty, income equality, regional disparity and illiteracy facing the country, said Austerity and Reforms Adviser Dr Ishrat Husain.
Delivering a keynote address at the third International Conference on Islamic Banking and Finance on Wednesday, organised by the Institute of Business Management (IoBM), Husain argued that Islamic banking can contribute heavily to solving poverty alleviation, affordable housing, microfinance, financial inclusion and educational outreach.
The two-day conference hosted international speakers from the USA, Australia, Saudi Arabia, Bahrain, Malaysia and Qatar.
“Those who do not believe in financial inclusion because of faith can be reached through Islamic banking,” he said.
The adviser highlighted that non-performing loans are one of the biggest challenges to the industry; Islamic banking, being Shariah-compliant, can assess the risk better than conventional institutions.
He said that using the same strength, Islamic banking is more suitable to fund startups which are otherwise avoided by conventional banks.
“The government is investing in the knowledge economy to develop human capital,” he said, adding that there is a need to help young entrepreneurs, provide education to rural women and promote the programme-lending business model.
Husain stressed the use of Ijara in agricultural financing and to educate poor students from backward areas. “The prime minister is very keen on providing low-cost affordable housing to people and Islamic banking can play a pivotal role in it.”
Published in Dawn, November 7th, 2019