Takaful to achieve economic justice

Magda Ismail Abdel Mohsin () and Aishath Muneeza ()

Chapter 6 in Inclusive Finance, 2025, pp 89-107 from Edward Elgar Publishing

Abstract: Takaful, the Islamic alternative to conventional insurance, embodies principles of mutual assistance, ethical risk-sharing, and collective responsibility. Rooted in Islamic traditions such as ‘aqilah and institutionalised in the early Islamic state, takaful serves as a powerful tool for achieving economic justice by safeguarding individuals and communities against financial uncertainty. This chapter delves into the concept and frameworks of takaful, emphasising its role in fostering inclusivity, equity, and poverty eradication. The chapter explores the social dimensions of takaful through the lenses of social takaful and micro takaful. These frameworks empower disadvantaged and low-income groups by providing accessible financial protection and enabling them to participate in risk-sharing mechanisms. Practical applications are highlighted through case studies that demonstrate how innovative takaful schemes have addressed challenges in health, agriculture, livelihoods, and gender equity across diverse regions. Further analysis examines takaful's global impact on financial inclusion, economic stability, and sustainable development. It underscores takaful's alignment with Shariah principles and its potential as an ethical solution to contemporary socio-economic challenges. Finally, the chapter synthesises these insights to advocate for the integration of takaful into global growth strategies. By addressing issues of economic justice and fostering sustainable development, takaful emerges as a transformative model for equitable financial systems that resonate with Islamic values.

Keywords: Takaful; Islamic Insurance; Mutual Assistance; Economic Justice; Social Takaful; Micro Takaful; Financial Inclusion; Ethical Risk-Sharing; Sustainable Development; Socio-Economic Empowerment (search for similar items in EconPapers)
Date: 2025
ISBN: 9781035348763
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