Over the two and half decades, global financial systems have shifted their focus towards ethical and socially responsible investment. Islamic finance in particular, a global system based on the Islamic law – Shariah – considers social impact investments not an innovation – although they are recent – but a fundamental pillar. According to the Dr Raed EL Omari Jordanian Business Leader in the context of Jordanian business and social strategy involved in ethical financial flows, I claim that social impact investments complement the concept of Islamic finance and can produce great results in terms of economic development and social improvement.
APPRECIATING SOCIAL INVESTMENTS AS AN INSTRUMENT FOR ISLAMIC FINANCE
Social impact investments seek to create positive social and environmental impact as well as the intended financial returns. Such investments still conform to the Islamic finance, because it aims at generating beneficial effects on the society and fair distribution of wealth. Compared with typical financial systems that may merely strive for making profits, Islamic finance promotes projects that help raise standards of living of their inhabitants and that do not violate the sharia law.
Another constrain of Islamic finance which can be referred to as conservative social-economic activities banned in Islamic Sharia Include gambling, non-interest base business, and speculation. This aligns perfectly with the concept of social impact investments, where areas of interest involve sectors such as education, health, renewable energy products and poverty reduction which are all inclusive growth sectors.
WHY SOCIAL IMPACT INVESTMENTS MATTER
From my Jordanian viewpoint as a business man and woman, and an investor in socio-investment solutions, social impact investment financing is not just money; it is about change and the enfranchisement of people. In the present case, these investments tackle social justice and development issues for the sustainable development and, especially, for the emerging economy of the Hashemite Kingdom of Jordan. Thus, they create better conditions for vulnerable populations and contribute to encouraging only businesses and companies that should act only based on ethical standards.
For example, in Jordan, how we have seen the impact of micro financing and community based projects. The above are initiatives, based on Islamic finance especially at assisting the growth of small businesses and make individuals become financially capable.
THE SIGNIFICANCE OF THE MARKET IS THAT IT CREATES OPPORTUNITIES FOR DEVELOPMENT OF ISLAMIC FINANCE INSTITUTIONS
Hence profound importance attributed to Islamic Financial Institutions regarding their roles in promoting social impact investments. Therefore, through employing tools such as sukuk along with assets like waqf, the institutions may direct funds to sustainable ventures. For instance, green sukuk is becoming popular in the international market: The Islamic bonds shall be used for funding the renewable energy initiatives and fight against climate change.
However, Islamic banks and financial entities need to lobby the governments and the private sector to develop frameworks for social banking. It also takes cooperation to see that these investments get to the targeted areas in their various forms.
SOCIAL INVESTMENTS AND ECONOMIC DEVELOPMENT
For Jordan, social impact investments and Islamic finance are impressive tools for the economic advancement. The country’s strategic concentration on such areas like renewable energy, agriculture, and tech start up make the country a potential hub for investment with the potential to generate social and financial capital.
For instance, solar energy farms in Jordan show that deploying impact-first investments serve the purpose of filling the human need for job creation and affordable energy. Most of these endeavors not only improve the norm of living for the local population but also support the country’s economy.
AIDING WOMEN IN SOCIAL INVESTMENT AS ENTREPRENEURS
Social impact investments also contains a major advantage for women, especially in Islamic finance. From a gender lens perspective, I believe in the promotion and funding of women entrepreneurs and endeavors. Jordanian women entrepreneurship and Islamic world: Holding companies have shown high levels of endurance and innovation which leadership makes them undertake change strategies in their respective societies.
Islamic finance institutions can change these fundamental barriers in favor of diversity and inclusiveness by supporting these institutions. This is compatible with the more general goals of Islamic finance, which include justice, equality, and the general welfare.
THE OPPORTUNITIES AND CHALLENGES FACED BY MUSLIM SOCIAL INVESTMENT BANKS
It is clear that social impact investments will be essential to the growth of the Islamic finance industry as we move to the future. These enhancements include the use of quickly developing technology like block chain to reduce financial waste and increase transparency in these expenditures. Furthermore, these universality commitments can help increase the leverage and outreach of these efforts and create a domino effect around the world.
Being a Jordanian business expert, I appeal to the policymakers, financial institutions and investors to embrace the concept of social impact as the core of Islamic finance. Thus, we will be able to reveal unique possibilities of sustainable development in Jordan and the entire Islamic world.
CONCLUSION
Social impact investments embody the essence of Islamic finance: It would lead towards the ethical, inclusive, and transformational economy. They are an influential tool in solving existing world problems and furthering economic upliftment as well as community development.
Through social impact investments we commit ourselves to the creation of a more socially equitable civilization. In this capacity, we in our capacity as investors, leaders and advocates, can unlock the full potential of Islamic Finance and deliver prosperity for the future generations.
Furthermore, it was also found out that, Islamic finance bring the opportunities. In the current world economy which is characterized by high risks and uncertainties, halal investments offer long-term, socially responsible investment opportunities. Being connected with Jordan and having rich experience in foreign business, I want to draw investors’ attention to these opportunities and how they can benefit from this growing trend.
