216 AN INTRODUCTION TO ISLAMIC FINANCE
Takaful (Islamic Insurance)
The closest Islamic instrument to the contemporary system of insurance is
the instrument of takaful, which literally means “mutual or joint guaran-
tee.” Historically, demand for insurance products has been much lower in
Muslim communities than in conventional markets such as North America
At a meso level■ (^) Develop knowledge base through research in issues pertaining to
building
■ (^) Islamic inclusive fi nancial systems
■ (^) Document, collate and translate best practices from microfi nance
across the world; undertake training and education programs to
impart microfi nance - related special skills to bankers
■ (^) Undertake training of trainers to impart managerial and account-
ing skills to users of microfi nance
■ (^) Encourage formation of apex and regional industry associations
whose objective is the development of Islamic microfi nance through
human resource development, technical assistance, operational
standardization and fi nancial product development, facilitation
of vertical and horizontal communication among Islamic fi nancial
institutions, advocacy and participation in policy dialogue
■ (^) Create zakah and awqaf funds at a global level dedicated exclu-
sively to poverty alleviation and linked to microfi nance institu-
tions downstream
■ (^) Help create a rating mechanism in member countries for Islamic
microfi nance institutions.
At a macro level
■ (^) Assist member countries to develop a regulatory framework for
Islamic microfi nance
■ (^) Support policymakers to ensure that there is an enabling policy
framework conducive to the development of Islamic microfi nance
■ (^) Support and facilitate the integration of zakah and awqaf in
fi nancial - sector reforms
■ (^) Build an effective alliance and forum of Islamic microfi nance pro-
viders and other stakeholders.
Source: Islamic Microfi nance Development: Challenges and Initiatives, 2008, IRTI, IDB