How the UN’s refugee agency is aiming to tap into Islamic social finance

To facilitate donations, and given that more than half its beneficiaries are from Islamic Cooperation Organisation countries, UNHCR has launched a mobile app version of its Zakat Refugee Fund.

In an interview with Arabian Business, Houssam Chahine, head of UNHCR’s private sector partnerships in MENA, discusses the reasoning behind going mobile with the Zakat Fund and why he sees big opportunities for philanthropy and giving in Islamic finance.

Zakat is part of Islamic finance and refers to the obligation that an individual has to donate a certain proportion of wealth each year to charitable causes.

Can you give us a brief on the refugee situation over the past few months?

In our region alone there are 10 million people who are definitely vulnerable this winter. Here we are talking about internally displaced people in Iraqi, Syria and Yemen as well as in Lebanon, Jordan and Egypt.

Because of Covid, the situation worsened for refugees, internally displaced people, and host communities. The lockdowns deprived those working in the shadow economy from an income and the deteriorating economic conditions exacerbated an already dire situation.

Luckily, we didn’t have big COVID breakouts in refugee camps. We took some measures, such as early lockdowns of some camps and the distribution of masks and sanitisers to control the spread of the virus.

Things are changing to the worse, however, as some countries such as Lebanon are witnessing a spike in cases and as the winter season forces people indoors.

What made you think of launching the Zakat mobile app?

With Covid, it was really challenging but at the same time, we saw that online donations started to pick up as e-commerce became the norm.

People started to give more online, and since we already had a refugee Zakat fund, we decided to benefit from this and we launched the app earlier this year.

What are some of the main features of the app?

There are eight countries you can donate to through the app, including Malaysia and Nigeria. Anyone in the world can donate through it, though, and it is available in both English and Arabic.

We’re adding as many countries as we can although we’re not doing that very quickly just to make sure that the mechanism works very transparently.

The app is very special because it’s the first UN Zakat app. It’s not only for Zakat, though, as it gives users the option to give other donations so anyone can give a onetime regular donation or set up monthly donations if they wish.

It’s very easy to use and meaningful in that it provides users with updates and reports on the families they are supporting so they can see the impact of their donation.

It sends notifications when it is time to renew the Zakat and highlights the gaps in refugee needs in each country.

The refugee Zakat fund is also the first donation vehicle in the UN system where you don’t have overheads. 100 percent of the donation goes directly to the refugee family that the user specifies.

Zakat is part of Islamic finance and refers to the obligation that an individual has to donate a certain proportion of wealth each year to charitable causes

How will you move forward from here?

The plan is to add other elements of Islamic social finance. We want to have a package of vehicles of giving within this app so people can easily pick and choose how they want to support displaced people around the world.

What are the potentials of Islamic finance when it comes to donations?

It wasn’t easy for a UN agency to say that they’re going to work with faith-based philanthropy because they wanted to make sure they’re doing it right. So what we did is we partnered with some thought leaders, scholars, and some other partners in the region to make sure that we’re perceived in the right way when we launched the program and that it is backed up by religious authorities.

That was new for a UN agency but more than 50 percent of our beneficiaries actually are in Muslim countries and we are on the ground helping refugees, the displaced people and even local authorities and communities to help refugees.

So we wanted to give the Muslim community the potential to contribute and I can assure you that a lot of UN agencies are looking into this because the potential is huge.

Houssam Chahine, head of UNHCR’s private sector partnerships in MENA

Have you seen that philanthropy and giving have increased in our part of the world over the last year?

If you’re asking me about whether it increased prior and post COVID, I would say, at least digitally it did.

I didn’t see a big shift when it comes to regular donors or big donors or foundations. But what I see more of is individual donors who are at home and are taking the opportunity to find their cause. And when they do, they find that just like any other transaction nowadays, it is easier to donate online through a mobile app.

We see as well that there is more empathy among people, although it is hard to quantify. Because of Covid, people are more easily identifying with each other even when they are afar: if you hear about a refugee in Sudan, it is easier for you to be moved by that now and to take action than it was before the pandemic.