Project (proposal) on

Islamic Finance for Imams

by MUHAMMED ASLAM SHARIEF

BismillaHirrahmaNirraheem

What is among the most important duties of every Muslim ?

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Among other fard, is Prayers (Salaah), five times a day for every Muslim –

- Rich or Poor,- Male or Female,- Young or Old,- Gainfully employed or unemployed,- Salaried or Self employed ….

THE ERA OF THE PROPHET (PBUH)

We all know that the Prophet (PBUH) and the Caliphs and other Sahabis had all been engaged in striving for a livelihood (to earn a Halaal income) besides their Dawah work and offering their daily prayers as well.

CURRENT ERA

But in our current era, most Imams in the Muslim community merely lead the Prayers (and perhaps teach part-time in Madarsas) only to earn a meager salary.

In the days of the Prophet (PBUH), Imams did not earn a salary for leading prayers.

They (today's Imams) are rather more similar to the priests of other faiths (in their insignificant contribution to economic & other development of the society) than to the Prophet (PBUH), the Caliphs and Sahabis.

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Yes, …the meager salary an average Imam earns for leading Prayers (and part-time teaching - if any), compels him to hanker for charitable hand-outs from the rich.

We all know…We all know…

An average Imam today, lacks the courage An average Imam today, lacks the courage or the confidence to confute the affluent or the confidence to confute the affluent and to correct them in matters of Islamic and to correct them in matters of Islamic discipline despite having the knowledge of discipline despite having the knowledge of what is Islamically right and what is not.what is Islamically right and what is not.

Because…Because… He does not want to displease and disturb He does not want to displease and disturb

his source of charitable hand-outs.his source of charitable hand-outs. And…And… The net contribution of the Imam is The net contribution of the Imam is

therefore therefore restrictedrestricted to leading Prayers, to leading Prayers, teaching children Arabic.teaching children Arabic.

It is a fact that…

The average Imam leads a rather unprivileged life and has to depend on sources other than his salary to make ends meet.

And all this is due to the lack of Economic freedom to the imams.

My humble and sincere attempt through this project (proposal) is to ;

(1) Implement a working and economically viable business model of Islamic Finance in India (2) Liberate the average Indian Imam from his hankering & dependency on hand-outs (3) Explore the possibility of making economically productive use of the spare time and

potential of Imams to their own benefit so as to;

Enhance their self respect and self esteem. Help them contribute to the economic output of the Society

by taking part in domestic Commerce Open avenues for Imams to become worldly-wise Open another channel for Dawah by facilitating wider

interaction of Imams with the general public And thereby help restore the sinking image of our

community

How can this be achieved ?

Almost every mosque has a property of its own – The building it is housed in, and; any appurtenant shop/s or commercial

space let out to earn rental income for the mosque.

….How can this be achieved ?

This commercial space or a part of it may be used to allow the imam run a small business in his spare time –

That is, during the time he is not engaged in his duties as Imam.

This would provide the Imam a window to earn a respectable additional Halaal income.

. The commercial activity can be any

Halaal activity that does not interfere with his schedule as an Imam.

A lean stock of groceries or any other Halaal merchandise to be sold at a FAIR PRICE would serve the purpose.

Alternatively, we may consider MICRO, SMALL and COTTAGE Industry models as well (pls. refer slides on this topic)

Following are the essentials to be born in mind in order to ensure;

This route serves the ends of Daawah as well Makes the public aware of Islamic principles

of Commerce such as;Taboos on Interest, Adulteration, Hoarding,

Cornering, price rigging etc., Fosters deeper trust and amiability towards

Muslims in the minds of Non-Muslims Provides respectable Halaal means of

additional livelihood with dignity for Imams Is a window for wider interaction between

the imam and the general public.

THE EXECUTION (PLAN)

A ‘pilot’ of the project for 3 – 6 months be undertaken by a Committee that is in total control of at least 10 mosques spread over a rather wide geographical area.

An ad hoc ‘Governing Committee’ be appointed to implement and monitor the affairs of the pilot run.

The (initial) stock in trade to be funded by the Committee out of a separate fund/account opened for the purpose.

Clear and detailed rules to be drafted by the committee governing the;

Nature, time/hours of business, respective roles of the Committee members and Imams in the venture suitability/eligibility norms of the imams (Age, secular education etc.,), Code of conduct during business, Price fixation, Service-quality norms, Broad reasons that could lead to dismissal/removal of the imam from the

project (while still continue as an Imam of the mosque), Mechanism for dispute resolution, Employer-employee relationship between the Committee and the Imam, Ownership of stocks, Committee’s Right to profit and accounts, Profit &

Risk sharing norms and their percentages, Any additional liberties allowed to the Imams etc.,

A written undertaking (Contract) to be signed by the Imam confirming his willingness to run a commercial venture on a Profit-Risk sharing basis (ISLAMIC FINANCE MODEL - Musharaka) that shall be co-terminnous with his tenure as Imam of the mosque whereby the imam shall hold this office (ex-officio) by virtue of his holding the post of Imam.

The Business Model

All outlets across, manned and run by the Imams under the Committee shall be Owned, governed, monitored by the Committee.

The Committee shall comprise members formally educated in Islamic Shariah/Finance, Conventional Finance etc.,

All outlets shall bear a SINGLE COMMON NAME (e.g., Shariah Traders Association) and shall operate under ONE duly registered COMMON SEAL (in order to maintain a standard and to achieve the ends of Dawah).

All outlets within a state/region shall maintain a standard and uniform tariff monitored by the committee on a daily basis.

A mechanism to preempt stocking and sale of adulterated, substandard or harmful goods to be in place by regular visits and surprise checks by the Committee members.

I propose a HIGH-CAPITAL-TURNOVER-RATIO model for this project whereby focus is on larger volumes of business based on smaller profit-margins and FAIR PRICES.

This must be a purely BUSINESS model (devoid of charitable lenience), closely monitored and well documented to prove the economic viability of the concepts of Islamic Finance and provide a basis for other similar models.

FUTURE OF THE PROJECT/PROPOSAL

Insha Allah, if this model is implemented with careful thought and detailed planning, by the grace of Allah SW, it can be extended to wider geographies and can help the Imaam-community as a whole.

If this ‘Pilot’ Committee works with the required discipline, coordination and commitment, it can extend its governance to Imams of Mosques it does not own.

If implemented well Insha Allah, FAIR PRICES, HALAAL Products, ISLAAMIC ETHICS OF COMMERCE etc., would serve as means of DAWAAH to the Non-Muslims.

Going forward, this venture could take the shape of a Corporate running a Retail-chain and can attract investments from Muslims by providing a 100% Shariah compliant equity for an Indian company with no Debt component in its capital.

Other Muslim traders involved in Un-Islamic business practices may follow suit and adopt Islamic ethics and practices.

Fair prices, Low margins and Islamic ethics (would help curb local price fluctuations, artificial demand, inflation etc., and) would benefit the society and our nation as a whole.

Some MICRO, SMALL or COTTAGE Industry models could be …

LOW/MEDIUM INVESTMENT & SKILL PROJECTS

Orders from Textile giants such as Chennai Silks for Jute (carry) bags that can be made by Imaams (and their family members).

Candle making. Bar-code label printing. In rural areas – Handloom work.

… Some MICRO, SMALL or COTTAGE Industry models could be …

Cap knitting, Chamki, Embroidery, Hemming work (for the Imaams family as well)

Contracts from Hotels/Restaurants to make Masala Mix, Curry powder etc.,

Wood planing Jewelry making – (But this requires training)

…Some MICRO, SMALL or COTTAGE Industry models could be … Cleaning powder (2 varieties) Washing powder (3 varieties) Liquid soap oil White phenol Liquid blue Agarbatties Instant Samarani Shampoo Tooth powder Face powder Head ache balm Wax candles Wax toys

A one-time training session for about 30 candidates, to demonstrate preparation of these items can be arranged through MSME Institute (SISI).

Cost of raw material for demonstration – Rs.2700/-

Contact person: Mr.N Vijaykumar:9841211383

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Contracts for all such MICRO, SMALL or COTTAGE Industry models need to be centrally sourced and allocated (subcontracted to the respective Imaams/their families) by the Governing Committee.

Similar models may be used for Muazins and their families as well.

. Please feel free to give your

feedback, critical comments, suggestions.

JazaakAllahKhair

MUHAMMED ASLAM SHARIEF aslam0308@yahoo.com Mobile:9445155783