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The Impact of COVID-19 Pandemic on Islamic Finance According to the Dinar Standard Report 2021/2022
Author : Dr. Safwan Odaybat
Date Added : 11-09-2022

The Impact of COVID-19 Pandemic on Islamic Finance According to the Dinar Standard Report 2021/2022

 

COVID-19 pandemic had an evident impact on the economic, social, and political sectors of life. The Islamic finance sector is a key contributor to economic life worldwide, given its development and incremental aspects of growth in recent years.

Amongst the most important and precise technical studies indicating the impact of the COVID-19 pandemic on Islamic finance (2021/2022) in numbers is the report prepared by Dinar Standard in partnership with Salam Gateway with the support of DIEDC. This report was published by the International Islamic Center for Reconciliation and Arbitration (IICRA) in Dubai, Edition No. (19), 4rth quarter, 1443 H/June 2022.

The key points of this report are:

First: The value of Islamic finance assets in 2019 has risen from 2.52 trillion US dollars to 2.88 trillion US dollars amounting to 13.9%. The report expected this sector to recover over the coming five years with an overall growth by 5%.

Second: The rapid growth of the Islamic Takaful insurance, especially in the Gulf countries and Indonesia.

Third: 2020 witnessed a large number of initiatives and measures that help enhance the growth of Islamic finance, particularly in the countries of the Organization of Islamic Cooperation. In addition, it was decided to establish new Islamic banks in countries such as Tajikistan, Uganda and the Philippines, in addition to digital banks in Kazakhstan and Malaysia.

Fourth: The investment of Islamic Financial Technology as well as the combination Islamic financial institutions through out possession and combination that reached 4.93bn. in 2019 to 2020.

Fifth: The activity of the Islamic Sukuk decreased but didn`t stop where it was announced that new Sukuk were issued in south Africa, Nigeria, Britain, Gulf and south east Asia countries.

Sixth: Developing the sector of social finance through collective funding, fostering partnerships between the private and public sectors or supporting small and medium-sized finance institutions. 

Based on the above notes, the following can be noticed:

  1. Despite the fact that the report was prepared during the COVID-19 pandemic, Islamic finance has witnessed an evident growth and recovery is expected in the coming years. In the same year of preparing this report, the number of the Islamic finance institutions has reached 1462.
  2. Adopting social finance that rests on Takaful and cooperation between people to ease their problems, as is the case with Zakah (Alms giving) and Sadqah (Voluntary charity) and providing financial support to small and medium-sized financial institutions. Moreover, partnership between the private and public sectors is an example of this form of finance. New platforms have been established for collective funding between counterparts in Britain and Malaysia, and an initiative was launched to benefit from social Islamic finance in the UN in partnership with the Islamic Bank for Development in 2021 (news.UN.org).
  3. The COVID-19 pandemic encouraged Islamic finance to develop financial technology through modern electronic platforms, digital banks, and distinguished services of digital banking.
  4. Islami Sukuk have witnessed a remarkable growth within the recent years. As indicated by the report, this product hasn`t stopped despite the impact of the COVID-19 pandemic where their issuance was resumed in several countries. Here, it is worth pointing that later in the year 2021, the fourth issuance of the Sukuk for the Murabah to the purchase orderer were issued in favor of the Jordan National Electricity Company to fund the energy sector with a total value of 225 million JDs by an annual Murabaha percentage of 3.55% over five years.

Unequivocally, these notes indicate that the Islamic finance sector is replete with Sharia, technical, and legal competencies enabling it to face difficult situations, such as COVID-19 pandemic to create an opportunity to keep abreast with developments, innovate new products to address the needs of the people, and continue Islamic finance services.  

 

The published article reflects the opinion of its author

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Summarized Fatawaa

Does the intention (niyyah) of the principal (muwakkil) suffice for the sacrifice (dhabḥ) of the udhiyyah?

Praise be to Allah, and peace and blessings upon our master, the Messenger of Allah.
If a person appoints an agent (wakīl) to perform the slaughter (dhabḥ) on their behalf, the intention (niyyah) of the principal (the one appointing the agent) suffices, and there is no need for the agent to have this intention himself. In fact, even if the agent is unaware that he is performing the sacrifice on someone's behalf as an udhiyyah (sacrificial offering), this does not affect its validity. And Allah, the Most High, knows best.

What is the ruling on fasting?

Fasting in Ramadan is an individual obligation (Fard ‘Ayn) upon every mature, sane Muslim who is capable of fasting.
Fasting can also be recommended (Mustahabb), such as voluntary fasting on Mondays and Thursdays, fasting on the Day of Arafah for those not performing Hajj, and fasting on Ashura.
Fasting can be prohibited (Haram), such as fasting on the two Eid days, the Day of Doubt (Yawm al-Shakk), and the Days of Tashreeq.
Some types of fasting are disliked (Makruh), such as singling out Friday or Saturday for fasting without a specific reason and fasting on the Day of Arafah for a pilgrim.

What is the ruling on one who vows to fast a specific or non-specific year? Are the two Eids, the days of Tashreeq, Ramadan, and the days of menstruation and postnatal bleeding included in them? And do these days break the consecutiveness if it was intended?

Praise be to Allah, and peace and blessings be upon our Master, the Messenger of Allah.
 
If someone makes a vow (Nadr) to fast a specific, designated year, this vow does not include the days of Eid, the days of Tashreeq (the three days following Eid al-Adha), Ramadan, or the days of menstruation (Hayd) and postnatal bleeding (Nifas). Furthermore, there is no requirement to make up (Qada) these specific days.
 
However, if someone vows to fast a year that is not specifically designated (i.e., any twelve-month period) and stipulates that the fasting must be consecutive, they are bound by that condition. They must not fast on the days of Eid, during Ramadan, or during menstruation, but they are required to make up these days afterward—with the exception of the days of menstruation and postnatal bleeding, which do not need to be made up.
 
It is stated in Hashiyat al-Bajuri ‘ala Sharh Ibn Qasim ({Vol.2/P.606): 'If one vows to fast a specific year, the Eid, Tashreeq, Ramadan, and days of menstruation or postnatal bleeding are not included. This is because Ramadan does not accept any fast other than its own, and the others do not accept fasting at all. Therefore, they do not enter into the vow, and no makeup is required for them because they are legally excluded—contrary to Al-Rafi’i regarding menstruation and postnatal bleeding.
 
If one vows to fast a non-designated year: if they stipulated consecutiveness (Tatuabu’) in their vow, they must fulfill it; otherwise, they are not bound to it. Consecutiveness is not broken by the days that do not enter into the specific year vow (Eid, Tashreeq, Ramadan, menstruation, and postnatal bleeding). However, one must make up the days missed—excluding the time of menstruation and postnatal bleeding—immediately following the end of the year. As for the time of menstruation and postnatal bleeding, it is not made up, contrary to Ibn al-Rif’ah, who argued that it must be made up just like Ramadan.' And Allah the Exalted knows best.

What is the ruling on performing the night prayer (*qiyām al-layl*) between the first and second adhān of Fajr? And which is better: delaying the prayer until shortly before the Fajr adhān, or performing it earlier than that?

 

All praise is due to Allah, and peace and blessings be upon our master, the Messenger of Allah.
The time for night prayer (qiyām al-layl) begins after the Maghrib prayer and lasts until the second adhān of Fajr. The best time for it is the last third of the night, and best of all are the fourth and fifth sixths of the night. If the night is divided into two halves, the latter half is better.
Whoever intends to pray at night is encouraged to delay the Witr until he has prayed the night prayer. If he knows that he will not wake up, it is better for him to pray and perform Witr before sleeping, so that he does not miss both the night prayer and the Witr.
It is stated in Mughnī al-Muḥtāj (Vpl.1/p.462): “I say: The voluntary prayer of the night, that is, the absolute voluntary prayer (al-nafl al-muṭlaq), is better than the absolute voluntary prayer of the day, because of the report in Muslim: ‘The best prayer after the obligatory prayer is the night prayer.’ In another narration of his: ‘In the night there is an hour that no Muslim man meets while asking Allah for any good of this world and the next except that He gives it to him, and that is every night.’ It is also because the night is a time of heedlessness. I restricted the voluntary prayer to the absolute kind following the commentator, although what the ḥadīth and the underlying meaning require is that the night rawātib be preferred over the day rawātib, since the jurists preferred the two rakʿahs of Fajr over everything except Witr. The middle of the night is better than its two ends if it is divided into thirds, because heedlessness is greatest then and worship is hardest. If he wishes to pray during some third, the best is the fourth and fifth sixths, based on the ḥadīth in the two Ṣaḥīḥs: ‘The most beloved prayer to Allah the Exalted is the prayer of Dāwūd: he would sleep half the night, stand for a third of it, and sleep for a sixth.’ Then the latter part is better than the first if he divides it into two halves, because of the saying of Allah the Exalted: ‘And in the hours before dawn they would ask forgiveness’ [al-Dhāriyāt: 18], and the report of the two Shaykhs: ‘Our Lord, Blessed and Exalted, descends,’ meaning His command descends, ‘to the lowest heaven when the last third of the night remains, and says: Who calls upon Me, that I may answer him? Who asks of Me, that I may give him? Who seeks My forgiveness, that I may forgive him?’”
It is also stated in ʿUmdat al-Sālik (p. 60): “It is better to perform it [the Witr] immediately after the sunnah of ʿIshāʾ, unless he has tahajjud, in which case it is better to delay it so that he performs Witr after it. If he performs Witr and then wishes to pray tahajjud, he prays two rakʿahs at a time and does not repeat the Witr, nor does he need to cancel it with a single rakʿah before the tahajjud. It is recommended that he not deliberately pray after it.”
Qiyām al-layl is a term applied to any prayer performed at night. Tahajjud, on the other hand, refers to the night prayer that follows sleep, whether it is prayed after Maghrib or after ʿIshāʾ, or the prayer performed after ʿIshāʾ without sleep. On this basis, the Witr is also called tahajjud, since it is only prayed after ʿIshāʾ.
It is stated in al-Majmūʿ (Vol.4/p.84): “The sound position, as stated in al-Umm and al-Mukhtaṣar, is that the Witr is called tahajjud.”
It is stated in Nihāyat al-Zayn (Vol.1/p.114): “Among the absolute voluntary prayers is qiyām al-layl. If it is performed after sleep, even during the time of Maghrib and after having prayed ʿIshāʾ early (taqdīman), it is called tahajjud.”
And it is stated in Ḥāshiyat al-Bujayrimī ʿalā al-Khaṭīb (Vol.1/p.418): “His statement: ‘(the night prayer)’: the genitive construction (iḍāfah) carries the sense of fī, meaning a prayer in the night. His statement: ‘(it would be more fitting)’: the reason it is more fitting is that the night prayer includes both tahajjud and other prayers.” And Allah Almighty knows best.