These days halal financing can be hard to find, and the current economic model has led to the financial stress on the poor increasing day by day. However, in the small city of Bhatkal in India, an Islamic institution aims to provide a ray of hope to those in need.
The Islamic Welfare Society Bhatkal provides interest-free Islamic loans to those who need it unlike traditional banks that often charge high interest rates. As a result, this is a very convenient option for borrower, many who are poor. The money being lent out is financed by the mosque.
Rather than charging interest, the Islamic Society accepts jewellery and gold as collateral.
However, in their 33 years of service, they have yet to sell or auction off a single piece of jewellery or gold, showing how sustainable their model is, for both themselves and the borrower.
This service is not designed for Muslims only and people of any faiths are welcome to take our loans. 30% of their customers are non-Muslim!
Unfortunately, the Indian government has yet to recognise the organisation as a bank, and therefore they have to operate as a society in Bhatkal.
Nevertheless, the Islamic Welfare Society Bhatkal is a shining example of how an Islamic institution can thrive in helping those in need in through Islamic teachings and principles.
H/T: Hashtag South Asia