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Interest Free Loans: Sahulat Credit Cooperative Society opens Branch in Bhopal

Pervez Bari | India Tomorrow

BHOPAL—A branch of the Sahulat Credit Cooperative Society providing interest free loans was inaugurated in Bhopal on Saturday.

The inaugurated was done by Shahar Qazi Maulana Syed Mushtaq Ali Nadwi at Nawab Hamidullah Community Hall.

A venture of Jamaat-e-Islami Hind (JIH), the society is a national NGO to facilitate interest-free microfinance to small traders and small businesses for removing socio-economic disparity and to achieve justice and equity for educational and financially backward sections of the public at large. People can also open their accounts and avail the facility of daily deposit schemes in the society.

Speaking on the occasion, Shahar Qazi expressed his happiness over the move to strengthen people’s economic condition without indulging into the scourge of interest. He emphasised that interest (Sood) is forbidden (Haraam) in Islam. He lamented that the bane of interest on which the world economy today revolves around leads to making rich people richer while poor is pushed into the quagmire of poverty and illiteracy.

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

Dignitaries at the inauguration of the Bhopal branch of Sahulat Cooperative Credity Society. Photo India Tomorrow.

Khadim-ul-Masajid Mufti Rahimullah Khan Qasmi and other clerics also spoke on the occasion, expressing their views.

Usama Khan, Deputy CEO at Sahulat Microfinance Society at JIH headquarters in New Delhi, spoke about the mission and vision of the Society.

A ‘Third Way’

Addressing the assemblage, Usama Khan said that Sahulat Credit Cooperative Society is a National NGO to facilitate Interest-free Microfinance Institutions. It is a voluntary, non-political, non-profit making social service organization established to provide Interest-free microfinance options. Explaining he said, advocates of Islamic economics generally describe it as neither socialist nor capitalist, but as a “third way”, an ideal mean with none of the drawbacks of the other two systems. In 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, axing 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 operation, research, finance and administration related areas, said the mission of Sahulat Microfinance Society registered 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 aims at facilitating, promoting and developing interest-free micro-finance institutions(IFMFI), undertaking and promoting need-based research and developing different products and financial instruments for IFMFI, establishing training institutes and data banks for IFMFI and evolving internal check system and audit facilities and coordination with affiliated institutions and advocating with policy makers for a justifiable national policy on interest-free micro-finance in India.

Sahulat’s definition

The Sahulat’s definition of interest-free microfinance through cooperative is: “A Cooperative Credit Society formed by its members for pooling their funds and creating loan-able funds there from for addressing their loan demands from time to time, mutually sharing the operational cost and owning the benefit and risk of operations”.

It may be mentioned here that Sahulat Microfinance Society was established in 2010. It is a voluntary non-political, non-profit making social service organization. It aims to provide interest free micro finance options for reducing socio-economic disparities and to achieve justice and equity for educationally and financially backward sections of the public at large. Its main function is to facilitating, organizing and developing institutions, more particularly in co-operative sector.

Working Model 

Interest-Free microfinance is an effective tool to fight against poverty. However, 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 to the people who might have lost their jobs during the pandemic. 

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

The program was attended amongst others by Maulana Shamsuddin, members of JIH Mohammad Shakeel Ismail and Dr. Syed Shahid Ali and Nastaran Bano Masjid Committee president Mohammad Laeeq.

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