The development of Islamic economic and financial concerns not only commercial issues, but also social finance (such as zakah, infaq and waqf). Since the Prophet Muhammad Rasulullah era, Waqf has been developed and plays a major role in the socioeconomic of Muslim. Whenever the Prophet recognized any need in his society, he immediately met it by creating waqf to provide this need and encouraging his companions to create waqf to meet those needs. On his arrival at Madinah in the first year of Hijrah, when the Prophet felt the need for Muslim place to pray, he constructed a mosque known as Quba. The Prophet built a new mosque known as Masjid an-Nabawi because of the increased number of people who became Muslim. The Prophet encouraged Utsman ibn ‘Affan to buy Rumah well of water and make it a waqf to provide water for all. Currently, this heritage has been extended to accommodate the need of society as waqf.
The waqf performance had a downturn. The government destroyed the waqf property and the secular system changed them. It was around 1924 when the Khilafah Utsmaniyah (Ottoman Empire) collapsed. Although the Turkish Republic thoroughly destroyed the cash waqfs, many real estate waqf survived. Today, despite the massive destruction process, there are many waqf heritage in the world and the number is steadily increasing.
In the healthcare sector, it was known that Spain did not charge a single person in the hospital in Andalusia. The waqf covered the operating costs of that hospital. In the field of education, the University of Al Azhar in Cairo is a good example of the important role played by a waqf, where students received free knowledge and even a decent cost of living and lecturers received from the return of the invested capital of a cash waqf. Waqf’s resilience has made a significant comeback. The waqf has proven that it can address modern needs. Recently, many people have paid much attention to the Waqf discussion.
Islamic financial systems not only relate to commercial finance under Islamic economic system, but also relate to social finance with the same goal of achieving fallah. There are many challenges faced by the Islamic social finance sector consisting of various not-for-profit modes of Islamic finance, zakah, waqf, and non-profit microfinance institutions. In this sector, institutions have to address the issue of sustainability in the supply of funds. A steady flow of social funds requires high social acceptability and credibility. Moreover, technological innovation has transformed the financial services industry over the past decade, and further disruption of the traditional financial sector is almost certain. Identifying these challenges is the first step towards meeting them.
Since technological innovation and financial system closely interact, in the face of these rapid changes, regulators need to strike a careful balance between stability and efficiency. Given the emergence of technological innovation and its challenges to the economic development as well as financial services sector, particularly social Islamic financial institutions, regulatory reforms may be necessary to maintain an effective and responsive supervisory framework.
It is a brief introduction to an Islamic Social Finance, it is hoped, will culminate in an effort to modernize these reviving issues to address the economic and social needs of contemporary Muslim societies.
To highlight some and more of these issues, the Seventh AICIF (ASEAN Universities International Conference on Islamic Finance) is being jointly organized by the International Council of Islamic Finance Educators (ICIFE), University of Darussalam Gontor Indonesia, Mindanao State University (MSU) Philippines, International Islamic University of Malaysia (IIUM), State Islamic University Sunan Kalijaga Yogyakarta, Universiti Islam Sultan Sharif Ali (UNISSA) Brunei Darussalam, Sultan Agung Islamic University, Fathoni Thailand University and Tazkia University College of Islamic Economics. The Conference will be held for three days during 3-5 December 2019, in University of Darussalam Gontor Indonesia, under the theme “Revival of Islamic Social Finance To Strengthen Economic Development Towards A Global Industrial Revolution”.
This conference aims to bring together scholars, policy makers, experts and practitioners to discuss the role of Islamic Social Finance in strengthening economic development, as well as the consequences of the revival of the emerging Islamic Social Finance in the global industrial revolution. The goal is to stimulate recommendations for Islamic social finance, banking and finance stakeholders for the future prospects of Islamic social finance in particular and Islamic finance in general. An important part of this is to reinforce the relationship among the involved universities in ASEAN countries that provides Islamic Social Finance program and then bring forward the solution that allows for such development.