AAOIFI and UNHCR Sign an MOU For joint initiatives and collaboration to enhance Islamic social finance

In a bid to strengthen collaboration and governance in the area of Islamic social finance, the UN Refugee Agency, UNHCR and the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) signed today a three-year memorandum of understanding (MoU). This initiative marks the beginning of a long-term partnership between both parties, with the aim of further developing Islamic finance tools for the benefit of the world’s most vulnerable refugees and internally displaced persons (IDPs).

AAOIFI, leading the global standardization and harmonization of international Islamic finance practices and financial reporting, is collaborating with UNHCR to exchange areas of expertise, create Zakat governance standards for international humanitarian organizations and develop other areas of Islamic Philanthropy for UNHCR. This will include Waqf, Sadaqah, Sukuk and purification funds, through creating relevant avenues for Islamic banks to engage with UNHCR. Building awareness through the joint organization and hosting of seminars and forums on areas of mutual interest is also part of the collaboration.

“Collaboration and partnerships with financial institutions and Islamic finance infrastructure organisations such as AAOIFI is at the core of UNHCR’s Refugee Zakat Fund engagement strategy. No impact can be achieved otherwise in response to the global displacement crisis affecting over 70 million people today”, said Mr. Khaled Khalifa, UNHCR’s Senior Advisor on Islamic Finance and Regional Representative to the Gulf Cooperation Council Countries.

“We very much welcome the signing of this landmark MoU with AAOIFI, capitalizing on their extensive expertise in Islamic finance, especially in light of COVID-19 outbreak that is affecting refugees who live in densely populated camps or poor urban areas. This pandemic is an emergency on top of an emergency”, added Mr. Khalifa.

Commenting on its first MoU with a United Nations agency, AAOIFI’s Secretary General, Mr. Omar Mustafa Ansari said: “We are pleased to embark with UNHCR on this purposeful journey, which can tailor Islamic social finance tools for the benefit of the world’s refugees. We look forward to building a strategic partnership to engage Islamic financial institutions and other industry players in the global humanitarian response to support refugees”.

In 2019, and after a two-year pilot, UNHCR launched its Refugee Zakat Fund, a trusted, compliant and efficient distributor harnessing the power of Zakat to transform the lives of the most vulnerable refugees and IDPs, including in hard to reach areas. Last year alone, the Fund assisted more than 1 million beneficiaries in Jordan, Lebanon, Iraq, Egypt, Mauritania, Yemen, Bangladesh and Malaysia. This year, the Fund continues to capitalize on partnerships to double this impact, especially amid a global COVID-19 emergency.