Globalizing Islamic Philanthropy with Fintech – II

The idea of Islamic fintech has been gaining traction not only among the Islamic finance professionals, but also among the researchers and the academia. The Third Annual Islamic Finance Conference held in Makassar, Indonesia this week chose fintech as its theme, where scholars unanimously agreed that harnessing fintech will have a positive impact on the Islamic financial services sector. As succinctly put by Dr Humayon Dar, Director General and CEO of the Jeddah-based Islamic Research and Training Institute (IRTI) at the event, “Fintech has enabled financial services to operate with greater efficiency, innovation and accountability. Digital technology also widens the opportunity for the industry to tap into new markets with lower cost structure and wider coverage.” I feel this captures the Islamic fintech story in a nutshell. The additional value that fintech brings in strengthens the case for globalizing Islamic philanthropy like never before.

It is interesting to note that Indonesia is also home to some innovative applications of Islamic social finance in general and Islamic philanthropy in particular towards achievement of Sustainable Development Goals (SDGs). Let me cite a few. In a unique initiative, the Badan Amil Zakat Nasional (BAZNAS), the apex zakat management body in Indonesia partnered with the United Nations Development Program (UNDP) to construct a Micro Hydro Power Plan in Jambi province as a zakat-based poverty alleviation project. It is perhaps a maiden instance of an apex zakat institution partnering with an international development agency to finance through zakat a project that is directly linked to the Sustainable Development Goals (SDGs). Provision of electricity (as an engine of development) to poor inhabitants from a remote village was considered a legitimate objective funded through zakat. A parallel ground-breaking initiative by UNICEF has sought to establish innovative partnerships, to leverage resources from zakat and support from mosque volunteers to help communities strengthen sanitation services. Both the international bodies are seeking to apply fintech for efficient mobilization and utilization of zakat funds on a global scale. More on this later.

A second event that may have significant implications for the globalization of the Islamic philanthropy sector, is the launch today of GlobalSadaqah.Com, a fintech-based initiative from Ethis Ventures, Malaysia. The project is backed by the expertise of an award-winning team – Umar Munshi, Co-founder of Ethis Ventures (Global Islamic Economy Award, 2016, UAE) and Joann Enriquez (on WOMANi2018 List compiled by Cambridge IFA). Its product manager, Mohammed Alim (a doctoral researcher in Alternative Finance) is a firm believer in a research-based and technology-driven approach to management of sadaqa and zakat funds.

I reproduce here my conversation with Br Umar Munshi on the eve of this launch.

WhatsApp Image 2018-07-06 at 21.29.021. What percentage of sadaqa or zakat funds mobilized is charged as platform and other related costs? In other words, what is the cost of raising sadaqa/ zakat? How does Global Sadaqa compare with other players in the field, e.g. Launchgood?

We charge a flat upfront service fee of 5% if funds raised for curating and featuring the campaign. We may also charge additional fees for follow-up and reporting services. The crowdfunding Industry standard is 3 to 10% is, depending on the services offered.

2. There are many charity-focused crowdfunds, both in the conventional and Islamic domain. How do you see Global Sadaqah being different from others? Is it a “me-too” product?

Crowdfunding for Islamic charity is very new with only a few platforms globally. Our key differentiation is that we restrict fundraising to only charities and organisations that we onboard and partner with, as opposed to the more open approach for most platforms. This is to ensure we only feature campaigns from credible parties.

3. What role you see for Global Sadaqah and similar crowdfunds in achieving the Sustainable Development Goals?

Our focus is both humanitarian aid and sustainable development. Some crowdfunding campaigns are aligned with the SDGs, and helps by activating public funds. Equally important, the spread of well-curated campaigns also creates awareness, support and deeper understanding. Global Sadaqah’s development focus matches a number of SDGs, with an additional focus on religious education.

3. In terms of geographical strategy, do you intend to focus on specific regions, if so, what is the underlying rationale?

As our name suggests, we want to serve the world. At the initial stage, our focus is more on 2 regions: Sub-Saharan Africa and Southeast Asia. We are also focused on helping refugees and providing aid to conflict zones.

4. Do you see Global Sadaqah playing a role in humanitarian financing – in relief and rehabilitation for internally-displaced-persons? Can use of fintech, such as, blockchain technology be used for providing relief and support by providing them with digital identities? What other applications of fintech you have in mind with potential in management of Islamic charity (sadaqa, zakat, wakaf etc.)

Aid for displaced people is definitely an area of focus. Crowdfunding can provide funds as well as be expanded to crowdsource items and volunteers. Digital identities can be useful but is not the panacea as it still requires a support system or authority to process and manage the registrar. Cashless payments using cards and chips can be utilised for refugees as an effective tool for specific purchases and provisions

5. What is the nature of existing and potential partners of Global Sadaqah and what do you plan to achieve together?

We have two types of partners, Charity Partners and Corporate Partners. All our partners are aligned with our Mission to bring transparency and accountability to Islamic Charity, and this forms the basis of our common vision. Charity partners tend to also have more specific focus, and our common goal is to create a sustainable flow of charitable funds through developing long-term relationships with donors. Our corporate partners are motivated to partake in the development of our Crowdfunding ecosystem, and lead the way to a more efficient allocation of Islamic Charity.

6. Any other aspect of Global Sadaqah that you may like to highlight?

Global Sadaqah is formed to serve and support the Islamic Economy, especially to bring value to incumbent institutions and organisations. We are not competing with traditional charitable groups, rather we want to assist them to digitise their fundraising and provide a platform for direct communication with donors to report on the progress and impact of their campaigns.


Undoubtedly, the future of Global Sadaqah will be closely watched by observers of the Islamic social finance scene. Its success in bridging the trust-deficit between Islamic donors and the institutions engaged in management of Islamic charity can potentially set a new trend in this sector.

Photo: Kuala Lumpur Skyline by Mohammed Alim

By Mohammed Obaidullah, Lead Research Economist at the Jeddah-based Islamic Research and Training Institute (IRTI), a member of the Islamic Development Bank Group. Opinions expressed herein are author’s own and do not reflect the official position of his employer, IRTI-IsDB.


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