Poverty Alleviation through Charity

I am surprised to find that there is an alternative to poverty reduction through micro finance / micro lending. The program is run by The BOMA fund in Africa. Through three programs, the Rural Entrepreneur Access Project (REAP), Agents of Change, and Cows For Kids, BOMA helps groups in northern Kenya learn how to run businesses, become leaders, and start on the road to self-sufficiency. Executive Director of the BOMA fund, Kathleen Colson says that we focus on economic empowerment, primarily with women, through the Rural Entrepreneur Access Project, or REAP. That's our signature program of micro-enterprise development.We identify and train people within villages to work as business mentors. They must have strong community roots, work well with women, and have a sustainable income through some kind of business. They then organize small businesses around groups of five women and provide them with business skills training and a small grant of 150 dollars. The groups are mentored for two years. She says that I think that grants are the right way to go for an effective poverty alleviation program when you're dealing in areas where you have the truly ultra-poor who don't have experience or skills with business. It's not so much about the 150 dollar grant as it is about the business skills training program and helping people identify the discipline that's required in starting these very small businesses. Her theory of helping the poors is very much in line with Quranic injunctions. "They ask thee what they should spend (in charity). Say: Whatever ye spend that is good is for parents and kindred and orphans and those in want and for wayfarers. And whatever ye do that is good Allah knoweth it well". Aya 215 Sura Al-Baqara

Debt Based Business - 1

Reading and thinking about debt / loan, I come to the conclusion so far that it is highly dangerous for one's wealth as well as for ethics to deal in it either as a lender or as a borrower as far as Muslim and Islam is concerned and this is best for the mankind as a whole as Allah (SWT) says that "And this was the legacy that Abraham left to his sons and so did Jacob; "O my sons! Allah hath chosen the faith for you; then die not except in the faith of Islam." Aya 132 Sura Al-Baqara

Let us discuss, first, why and how the debt is harmful for one's wealth. First, it is not possible to lend someone without any benefit whether pecuniary or else, Islamic or non-Islamic. So the discussion of usury / interest / mark-up / profit is irrelevant. It will be present in any transaction involving debt; pure loan transaction, credit based trading transaction, Islamic debt "Murabaha", "Ijara" etc. Second, in lending business there shall always be risk of default because future is an unknown entity, anything can go wrong beyond our most sophisticated analysis or our wildest dreams. As a Muslim, we have complete faith that what is said in Quran, is absolutely true.

"O ye who believe! devour not usury doubled and multiplied; but fear Allah; that ye may (really) prosper. " Aya 130 Sura Al-i'Imran

"That which ye lay out for increase through the property of (other) people will have no increase with Allah: but that which ye lay out for charity seeking the Countenance of Allah (will increase): it is these who will get a recompense multiplied." Aya 39 Sura Ar-Rum

"Allah will deprive usury of all blessing but will give increase for deeds of charity: for He loveth not creatures ungrateful and wicked." Aya 276 Sura Al-Baqara

"O ye who believe! fear Allah and give up what remains of your demand for usury if ye are indeed believers." Aya 278 Sura Al-Baqara

"If ye do it not take notice of war from Allah and his Apostle: but if ye turn back ye shall have your capital sums; deal not unjustly and ye shall not be dealt with unjustly." Aya 279 Sura Al-Baqara

"That they took usury (interest) though they were forbidden; and that they devoured men's substance wrongfully; We have prepared for those among them who reject faith a grievous punishment." Aya 161 Sura An-Nisa

"If the debtor is in a difficulty grant him time till it is easy for him to repay. But if ye remit if by way of charity that is best for you if ye only knew." Aya 280 Sura Al-Baqara

Two commandments from Allah (SWT) are very clear from above referred verses from Quran. First, usury/ interest/ mark-up/ profit on loan is forbidden, stay away from it otherwise take notice of war from Him and His Messenger (PBUH). Second, grant time to debtor in distress till he is able to pay or write off debt by way of charity. Both the orders are very difficult to obey if not impossible. How can one lend to someone without any benefit explicit or implicit? How can one give unlimited time to debtor, even in distress, for payment of his debt?

Sharia Compliant Investment

Islam is "According to dictionary, the word Islam, from the tri literal root s-l-m, is derived from the Arabic verb Aslama, which means "to accept, surrender or submit. “ A Muslim (Arabic: مسلم ) an adherent of the religion of Islam. The feminine form of 'Muslim' is Muslimah (Arabic: مسلمة ). Literally, the word means "one who submits to God"."

Hence, it can be said that Islamic Finance is conducting financial and business matters according to the commandments of Allah(SWT) expressed or implied.

Muath quoted Zaineb Sefiani at BMB Islamic that It is permitted for Muslims to invest in companies whose share of income from Haraam activities is less than or equal to 5%.

The question before us is can we mix Halal with Haraam ? If yes, then what should be the ratio of Haram to Halal or ratio of Haram in a given total quantity or value and what are the conditions or circumstances under which this is allowed? Before we go further, it is pertinent to clearly define what is understood as Haram.

Haraam (Arabic: حرام‎) (often Haram) is an Arabic term meaning "forbidden". In Islam it is used to refer to anything that is prohibited by the faith. Itsantonym is halaal.

The religious term haraam can be applied to:

• certain behaviours, such as adultery or abuse, abstention in the general elections (e.g. in Indonesia) and profane language.
• certain objects and sacrelige.
• certain foodstuffs or food ingredients, such as alcohol or pork.
• and also to foods, objects and people that would normally be halaal but which were tarnished in some or other way, for example meat slaughtered in a non-permitted way or people with certain sexual preferences.

Haraam has, over the years, accumulated additional non-traditional uses to it. In Arabic-speaking countries, such as Lebanon, saying "haraam" can mean, "what a shame" or "what a pity" (this meaning has been adopted by Modern Hebrew slang as well). This can be used formally or between friends. Children are commonly told not to mistreat other children or animals because it is 'haraam'.

Haraam also applies to ill-gotten wealth obtained through sin. Examples include money earned through cheating, stealing, corruption, murder or any means that involves harm to another human being. It is prohibited in Islam for a true Muslim to profit from such Haraam actions. Any believer who benefits from or lives off wealth obtained through Haraam is not a Muslim.

The word also appears in Amharic, the national language of Ethiopia. It connotes the same idea of prohibition on religious grounds, however it is used by Christians in the Ethiopian Orthodox Tewahedo Church, including bans on pork (more out of Jewish dietary laws, not Islamic).

Haraam is best known to non-Arabs by means of the related word harem, referring to the forbidden area of the palace where the women were quartered.

The Hebrew cognate Herem referes to the highest ecclesiastical censure in the Jewish community.

The use of the term varies between Arabic-speaking communities and non-Arabic-speaking ones.

In Arabic-speaking countries, the term is used to describe anything permissible under Islamic law, in contrast to haraam, that which is forbidden. This includes human behavior, speech communication, clothing, conduct, manner and dietary laws.

In non-Arabic-speaking countries, the term is most commonly used in the narrower context of just Muslim dietary laws, especially where meat and poultry are concerned, though it can be used for the more general meaning, as well.

I am failed to come up with anything in Quran that suggests mixing of Halal with Haraam. All I get is following Hadith

"Narrated An Numan bin Bashir

I heard Allah's Apostle saying, 'Both legal and illegal things are evident but in between them there are doubtful (suspicious) things and most of the people have no knowledge about them. So whoever saves himself from these suspicious things saves his religion and his honor. And whoever indulges in these suspicious things is like a shepherd who grazes (his animals) near the Hima (private pasture) of someone else and at any moment he is liable to get in it. (O people!) Beware! Every king has a Hima and the Hima of Allah on the earth is His illegal (forbidden) things. Beware! There is a piece of flesh in the body if it becomes good (reformed) the whole body becomes good but if it gets spoilt the whole body gets spoilt and that is the heart." (Sahih Al-Bukhari 1:49)

According to The Lawful and Prohibited in Islam by Yusuf al-Qaradawi "Another Islamic principle is that if something is prohibited, anything which leads to it is likewise prohibited. By this means Islam intends to block all avenues leading to what is haram. For example, as Islam has prohibited sex outside marriage, it has also prohibited anything which leads to it or makes it attractive, such as seductive clothing, private meetings and casual mixing between men and women, the depiction of nudity, pornographic literature, obscene songs, and so on.

Accordingly, Muslim jurists have established the criterion that whatever is conducive to or leads toward the haram is itself haram. A similar principle is that the sin of the haram is not limited only to the person who engages in it but extends to others who have supported him in this, materially or morally; each is held accountable according to his share. For example, in the case of intoxicating drinks, the Prophet (peace be on him) cursed not only the one who drinks them but also the one who produces them, the one who serves them, the one to whom they are served, the one to whom the price of them is paid, etc. This point will be discussed again later. Again, in the matter of usury, the Prophet (peace be on him) cursed the one who pays it, the one to whom it is paid, the one who writes the contract, and the one who acts as a witness thereto. Accordingly, we derive the rule that anything which assists in the doing of what is haram is itself haram, and anyone who helps another person to do it shares in the sin of it."

"whenever any permissible action of the believer is accompanied by a good intention, his action becomes an act of worship. But the case of the haram is entirely different; it remains haram no matter how good the intention, how honorable the purpose, or how lofty the aim may be."

"While Islam has narrowed the range of what is prohibited, it is, at the same time, very strict in seeing that its prohibitions are observed. Accordingly, it has blocked the ways, apparent or hidden, leading to what is prohibited. Thus, what is conducive to the haram is itself haram, what assists in committing the haram is haram, any rationalization for engaging in the haram is haram, and so on, to the last of the principles which we have elucidated. At the same time, Islam is not oblivious to the exigencies of life, to their magnitude, nor to human weakness and capacity to face them. It permits the Muslim, under the compulsion of necessity to eat a prohibited food in quantities sufficient to remove the necessity and save himself from death. On the basis of these and similar verse of the Qur'an, Islamic jurists formulated an important principle, namely, that "necessity removes restrictions." However, it is to be noted that the individual experiencing the necessity is permitted to eat the haram food with the stipulation that he is "neither craving it nor transgressing." This is interpreted to mean that he should not desire to relish it nor transgress by eating more than the bare amount needed to satisfy his hunger. From this stipulation, jurists have derived another principle, that "The quantity permitted is determined by the (magnitude) of the necessity." Here the underlying idea is that, even though compelled by necessity, a person need not surrender to it or embrace it with eagerness; rather he must live with what is essentially halal and seek a way to return to it so that he may not become accustomed to the haram or begin enjoying it under the pretext of necessity."