Sahulat Co-op Credit Society opened in Bhopal to give interest-free loans

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Dignitaries seated on the dais in the inaugural function of Sahulat Cooperative Credit Society in Bhopal.

Sahulat Co-op Credit Society, a national NGO to facilitate interest-free microfinance institutions, has opened its branch in Bhopal, the other day. Bhopal Shahar Qazi Maulana Syed Mushtaq Ali Nadwi graced the inaugural function held at Nawab Hamidullah Community Hall. It is a venture of Jamaat-e-Islami Hind, (JIH).

Addressing the inaugural function, the Shahar Qazi said that Sahulat Co-op Credit Society is a voluntary, non-political, non-profit-making social service organization. It was established to provide interest-free microfinance options to small traders and to small businesses for removing socio-economic disparity.

The move also aims at achieving justice and equity for educationally and financially backward sections of the public at large. Common people can also open their accounts and avail the facility of daily deposit schemes, he informed.

He expressed happiness over the move to strengthen people’s economic condition without indulging in the scourge of interest phenomena.

Stating that interest is forbidden (Haraam) in Islam, he said the bane of interest on which the world economy revolves around today makes rich people richer while the poor is pushed into the quagmire of poverty and illiteracy.

The Shahar Qazi said that Islam has a complete economic system based on Shari’ah. Islam accepts markets as the basic coordinating mechanism of the economic system. Teaching in Islam holds that the market, given the perfect competition, allows consumers to obtain desired goods and producers to sell their goods at a mutually acceptable price, he added.

Usama Khan, Deputy CEO at Sahulat Microfinance Society was especially present at the inaugural ceremony. He spoke at length throwing light on the mission and vision of Sahulat Co-op Credit Society.

A ‘third way’

Addressing the function, Usama Khan said that Sahulat Co-op Credit Society is a National NGO to facilitate interest-free Microfinance Institutions.

He said, advocates of Islamic economics generally describe it as neither socialist nor capitalist, but as a “third way”, an ideal means with none of the drawbacks of the other two systems.

In the Islamic economic system, the gap between the rich and the poor will be reduced and prosperity enhanced by such means as the discouraging of the hoarding of wealth, taxing wealth (through Zakat) but not trade, exposing lenders to risk through Profit sharing and venture capital, discouraging of hoarding of food for speculation and other activities that Islam regards as sinful such as unlawful confiscation of land.

Usama, who also leads the operation, research, finance and administration related areas, said the mission of Sahulat Microfinance Society (Regd. under the Societies Registration Act, 1860) is facilitating the establishment of interest-free microfinance cooperative branches all over the country to uplift the poor families.

He said Sahulat Co-op Credit Society aims at: (i) Facilitating, promoting and developing interest-free micro-finance institutions (IFMFI); (ii) Undertaking and promoting need-based research and developing different products and financial instruments for IFMFI; (iii) Establishing training institutes and data banks for IFMFI and evolving internal check system and audit facilities and coordination with affiliated institutions and (iv) Advocating with policymakers for a justifiable national policy on interest-free micro-finance in India.

Definition of Sahulat

Sahulat is: “A Cooperative Credit Society formed by its members for pooling their funds and creating loan-able funds therefrom for addressing their loan demands from time to time, mutually sharing the operational cost and owning the benefit and risk of operations”.

The Sahulat Microfinance Society was established in 2010. A voluntary non-political, non-profit making social service organization, Sahulat’s main function is to facilitating, organizing and developing institutions, more particularly in the co-operative sector.

Working model

Interest-Free Microfinance is an effective tool to fight against poverty. However, the convergence of other activities in the field of education, health and self-employment is needed to raise the living condition of poor people.

In India, interest-free microfinance institutions can be run as legal entities under various state cooperative acts or multi-state act. At present 26 such legal entities are working with 63 branches in 12 different states of India.

Meanwhile, JIH, Bhopal also launched “Lashkar Namkeen” with a view to creating job opportunities for people who might have lost their jobs during the pandemic.

At the outset, Ameer-e-Halqa, JIH Madhya Pradesh Dr Hamid Baig, delivered the welcome address. Maulana Naimatullah Nadwi conducted the proceedings of the function.

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