On 26 September 2019, UNICEF and the Islamic Development Bank (IsDB) launched an innovative fund that aims at reaching millions of children currently in need of humanitarian support in OIC countries. The idea of the fund was first announced last April during IsDB’s 44th Annual Meeting of Board of Governors in Marrakesh (Morocco).
Today, global humanitarian needs are at critical levels and children are especially vulnerable as they face the highest risk of violence, exploitation, disease and neglect. To address this need, the Global Muslim Philanthropy Fund for Children (GMPFC) will mobilize Islamic giving, including philanthropic and Zakat resources, towards humanitarian and resilience development programs that ensure the well-being of children. Projects include support for children in education, health and nutrition, water and sanitation, early childhood development, protection and youth empowerment. The fund will benefit from UNICEF’s on-the-ground presence and experience in all OIC countries.
This move from IsDB did not come as a surprise. It confirms IsDB’s President past commitments to position the bank as a catalyst in the achievement of SDG in OIC countries. The launch of GMPFC is a good news for the Islamic finance industry for two reasons. First, it sends a strong signal about the importance of Islamic finance active involvement in social issues. There no doubt that Islamic social finance has developed during the current decade, however, the industry achievements in the social sphere so far are not enough to address current social issues. Second, the GMPFC initiative confirms the Interest of large international organization such as UNICEF in Islamic finance and demonstrates that synergies with Islamic finance can play an important role in the achievement of SDGs. In the past, UNHCR (United Nations High Commissioner for Refugees) established a Zakat fund to alleviate the suffering of forcibly displaced people in OIC countries.
The fund, that will be administered by IsDB, seeks to raise US$250 million from private and public foundations, Zakat agencies and individuals. Although the fund purpose is clear, operational details have not been disclosed so far. In the coming weeks, the Islamic Finance industry and will be waiting for clarifications on the following questions:
- What marketing approach will IsDB use to convince individuals to donate to the fund knowing that historically, IsDB has been dealing more with governments and businesses?
- Which Fintech technologies will IsDB leverage to ensure transparency and efficiency?
- What would be the fund priorities in the first years and what are the fund commitments in terms of impact (SDGs targets)?
- What synergies will be built with the impact investing ecosystem in order to make the philanthropic funds more sustainable and more focused on income generating activities for beneficiaries rather than on simple cash transfers?
This article was first published in Islamic Finance news Volume 16 Issue 41 dated the 16th October 2019.