Islamic Financing: A Reality

Over a couple of years ago, Bai Wahida M. Abtahi, the soft-spoken lady who was also the president of Katiyakap, was wondering if a Shariah compliant micro-financing is possible as a project that the organization can take up.  “Sa umpisa, wala kaming alam kung papaano gagawin, pero may mga taong tumulong sa amin” (We have no idea at all how we were going to do it, but some people helped us in making this dream a reality), she recalled.

“It wasn’t easy but it was challenging,” said Bai Wahida who was very spontaneous in her sharing of how her organization has gone through the pains of pursuing Islamic micro-financing. But with sheer determination and will, Katiyakap embraced the way of life that has changed not a few among their clients.

In a study entitled “Assessing the Islamic Lending Practices in General Santos City: The Case of Katiyakap, Inc. which was undertaken by undergraduate students from the University of the Philippines Mindanao Nor-Aiza R. Unasl and Jon Marx P. Sarmiento of the College of Humanities and Social Sciences, the Islamic financing started by Katiyakap has also been practiced by small entrepreneurs in General Santos City.

With Katiyakap clients, some of the Islamic micro-finance practices undertaken by their partners include the Murabaha which is “cost plus or mark-up “ trading; the Musharaka, which is more on partnership or profit and loss sharing; and then the Ijara which is lease/rental.

Run by women who have, for decades, immersed themselves into development work that has helped many other women and their families, Katiyakap have made a landmark in Shariah-compliant micro-financing in General Santos City such that it has already made a niche for itself in the world of micro financing. 

Bai Yolanda M. Nawal who is the sister of Bai Wahida was also instrumental in making their efforts a success.  Admitting that the movers among them of this Islamic micro-financing had little, if none at all, background of Shariah compliant micro-financing, Bai Wahida said they had to be trained in the beginning, and learn from scratch, regarding this project.  Nevertheless, with the assistance coming from the Peace and Equity Foundation (PEF) that has been working on peace initiatives in Mindanao for over a decade, Katiyakap could not have found a more willing ally.

Registered with the Securities and Exchange Commission in 2009, Katiyakap started its peace advocacies, gender and development, networking and linkaging, and later microfinance.  Among its partners in the past include the ACT for Peace Program with its early recovery programs in Mindanao, birthing home, health and sanitation, promotion of traditional products and rehabilitation of water system.  With Mindanaw Commission on Women (Mothers for Peace) they have worked with Al Nisa-Ul Haq on Gender in Islam and with FUMBMW on Interfaith Dialogue and Islamic Microfinance with Peace and Equity Foundation (PEF).

Currently, the project on Profit Sharing Microfinance for Women Entrepreneurs of SOCSARGEN (Shariah Compliant) has occupied Katiyakap.  Starting its implementation in 2010, this project has stressed on microfinance support for Shariah compliant investments run by Moro women that has “no-interest, is just and fair, and transparent”.

As one of the prime movers of the current project being undertaken by Katiyakap with PEF, Bai Yolanda M. Nawal work hands-on with every partners the organization has with its Islamic microfinance.  She explains that at the outset, the Katiyakap leaders, staff members and some of its partners all had to undergo an orientation on Islamic Finance and the Islamic principles that goes with it, conducted by a Muslim scholar who studied in Madina, Saudi Arabia and Libya.

Bai Yolanda further elaborated that most of all, among the important things to be considered by the clients are the guidelines on Islamic Finance and the regulations by the rules derived from the Holy Qur-an, Hadith, Sunnah (prophetic practices), Fatwa and Fiqh or Islamic Jurisprudence or Shariah that focus on transactions (that) must be halal, authorized, clear and transparent, and that it is based on trust and honesty, just and fair, interest-free, asset based, and contractual certainty.

As mentioned in the UP study, with Katiyakap Inc.’s micro – lending, the organization has, for the most part, empowered the women as it was through the women’s efforts that their families have been able to avail of the financing and other material assistance for the Muslim families. 

Hence, three years since it has started with this laudable effort, Katiyakap, Inc. continues to serve its clientele.