By Rushdi Siddiqui
Ramadan is a period of introspection for Muslims and Islamic financial institutions to better observe Islamic teachings, appreciate our blessings and be moved to action by the burden of others.
In short, it’s a month of narrowing the gap between the rich and the poor.
For Islamic finance – it is a merger of faith and finance, for the Halal industry – a merger of faith and food, and for Shariah compliant hotels – a merger of faith and hospitality. Ramadhan offers the most brand building opportunities through PR exercises, such as sponsoring Ramadhan tents/foods and Azans, launching of new products and donations to mosques and orphans, as well as hand outs of Corporate Gifts to Muslims clients, for most conscious-minded institutions.
But, four questions come to mind;
1. Is Ramadhan the most opportune time to recruit more ‘bankable’ customers?
2. Do the photo-ops and press releases cancel out the spirit of donations and good intentions?
3. Should the right hand know what, when, where and how much the left hand is giving?
4. Is Ramadhan becoming a PR bandwagon everyone is jumping into?
If at a personal level, Ramadhan is a month of engagement in direct ibadah : individual sacrifice, abstaining from food, water, smoking, marital relations, from sunrise to sunset, should there not be an engagement of optional charity, beyond the obligatory Zakat donations, at the institutional level? Perhaps, partake in a sacrifice to the bottom line in the month of Ramadhan? Is it not that kind of ethic that differentiates Islamic financial institutions from their conventional counter-parts?
During the fasting month, many Islamic banks “pause” customer payment on the financing contracts on large ticket items like Islamic mortgages. The rationale of this kind gesture is to reduce the customer’s burden as they may need extra money to be spent on preparation of Iftar (breaking fast meals and dinners), family gatherings, grant charities and buying Eid-il-Fitr gifts for family and friends.
QUERY: Is this suspended monthly payment built into the tenor of the Islamic mortgage contract? Granted, Islamic finance is not charity finance, but where is the spirit of sacrifice for the Islamic bank? To some this appears to be the deft ‘smoke and mirrors’ of financial engineering.
The social responsibility of Islamic finance needs to be shown by conduct and felt in the community. The Islamic mortgagee is a bankable customer who probably knows he/she will be eating their next meal, at sunset. Obviously, that cannot be said for majority of the 1.6 billion Muslims living in abject poverty in places like sub-Saharan Africa.
A sacrifice worthy of publicizing photo-ops and press releases is if the Islamic bank took the Ramadhan suspended payments and established a Qard-ul-Hassan ‘fund’ and give out moneys to (1) those local Muslims and non-Muslims encountering verifiable financial difficulties, and (2) remainder sent to NGOs in the least developed Muslim countries. The second stage of the credit crisis has adversely impacted the real economy locally, hence, Islamic banks have written off part real estate. Unlike the real estate write-off, the one-off write off in collecting mortgage payments during Ramadhan is actually a build up of balance good will.
If Islamic finance is indeed for all of mankind then disbursements must also be valid for all humankind. This type of donation-cum photo-ops and news coverage, especially in the highly-influential western media, is a much needed investment in branding Islam.
After all, the philosophical foundation of the Islamic financing system is to place an equal emphasis on the ethical, moral, social and religious dimensions, to enhance the equality and fairness for the good of society as a whole.
Halal Industry
The halal food producers, much like Islamic financial institutions, seem to come alive during Ramadhan and introduce new product lines and menus under their brands to retain their existing customers and attract curiosity seekers. It would be interesting to hear from halal food companies on setting up competition for favourite recipes of their customers and the top, say, five become part of the company’s offering.
It’s not about a “Halal Food Idol”, but more about opening channels for inclusiveness for customers who may have felt ‘food disenfranchised.’ Obviously, the logical consequence of such events is a Halal ‘food show’ sponsored by companies with vested interest. A direct benefit of such shows, for Muslim food lovers, is to guide them on healthy eating habits , sharing of innovative recipes and most ideally, culinary methods which promotes weight loss during Ramadhan.
Thus, the halal food industry, whether it likes or not, has a certain responsibility to their customers beyond just one-way selling. They must engage the customer by involving them in the process of meaningful dialogue beyond the commonly used focus groups. The ideas from marketplace that get incorporated into the company product offering are the ultimate and efficient enfranchisement that produces world class chefs.
Shariah Compliant Hotel
Ramadhan is a month of massive F&B promotions by all major hotel chains on Iftar, Ramadhan tents, etc., in the GCC, Malaysia, and other Muslim majority countries. It is the busiest month for hotels, where all F&B outlets are full to the brim ! Islamic hospitality is an important essence the religion, and, Ramadhan, should be positioned as a hybrid between the ‘Oscars and World Cup’ for Shariah compliant (SC) hotels.
SC hotels should build forces and think of a collaboration to showcase the variety of halal food products and Iftar feast from the 57 Muslim countries and offer premium priced suites at “charitable rates” to ride on the “Ramadhan Campaign”.
Ramadhan offers the ultimate brand building platform for SC hotels, but they must first think outside the box to create a festive “Ramadhan Ambience”, over and above the decorative ornaments and lighting effects. More importantly, because the Ramadhan atmosphere is just as celebrative for Muslims as Christmas is for Christians or Diwali for Hindus, the onus is on the Islamic banks, Halal food providers, and SC hotels to make Ramadhan a “ joyous celebration” and Syawal a “season to be happy” for the Ummah at large !
The writer is Thomson Reuters’ Global Head of Islamic Finance based in New York.
