DAVAO CITY – In a seeming relentless effort to contribute to peace in Mindanao through the years, the Peace and Equity Foundation (PEF) has been advancing its advocacy on Shariah Financing since 2012, taking up the challenge to look for a business solution than can address poverty in Mindanao, thus the establishment of Shariah or Islamic financing program.
“PEF’s decision to invest in Islamic Financing or Shariah compliant financing was motivated by the Foundation’s desire to be an impact investor in social enterprise solutions to build assets and communities to create wealth”, Ricardo Torres, Jr., the Partnership and Programs Manager of PEF, said in a statement sent to the regional newspaper Mindanao Examiner.
He said the provinces in Mindanao, especially the Autonomous Region in Muslim Mindanao (ARMM), was the most challenging field, given that 6 out of every 10 households are classified as poor and 9) out of 10 are Muslim households.
PEF studied the Islamic finance market in 2012, together with the Al Qalam Institute at the Ateneo de Davao University. Surveys and consultations revealed that while there were development focused Muslim organizations engaged in peace advocacy and livelihood programs, only the AIIB and one MF organization were mentioned as investors in Islamic financing.
As a development investor doing development financing, PEF started to provide support for Shariah financing. With the financial assistance provided by Cordaid, PEF’s partner in its advocacy work for Shariah Financing in Mindanao, the organization has continued to support efforts promoting Shariah financing in Mindanao.
Cris Pasco, PEF’s Mindanao staff, said PEF had started Shariah financing with capacity building through exposure of its board of directors and staff on the actual implementation of Shariah in Indonesia.
Pasco said PEF’s efforts were more on trust building rather than financing. He said PEF has engaged about 30 clientele through their partners’ organizations based in Maguindanao and other Muslim areas.
“We are trying to develop institutions that is based on trust,” Pasco said.
He admits though that it is the most difficult part, considering that in the process it entails building trust on the regulatory compliant, the banking system, and more especially, build trust among partner organizations.
Recently, PEF partnered with the College of Business Administration and Accountancy of Mindanao State University (MSU Main Campus) in Marawi City to develop a support system in Shariah institution building in the Philippines.
The other Mindanao-based partner organizations PEF has been working with under the Shariah Financing includes the Al Qalam Institute for Islamic Identities and Dialogue in Southeast Asia based in Davao City that is working for understanding Islam, the Muslims and peoples of Mindanao.
And the Islamic University of Indonesia in Yogyakarta, Indonesia; the Federation of United Mindanawon Bangsamoro Women Multi-purpose Cooperative; the Kadtabanga Foundation for Peace and Development, and the Al Wataniya Credit Cooperative, all based in Cotabato.
By November, PEF, together with Al Qalam, will hold an international Islamic Financing conference in Davao to discuss how to further expand Shariah Financing in the Philippines. (Mindanao Examiner)
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