Dubai bank to aid low-income Muslims with $13m fund

Emirates Islamic Bank's fund, which is part-financed by zakat contributions, will support low-income UAE residents with food and housing costs

Emirates Islamic Bank, the sharia-compliant arm of Dubai’s largest lender Emirates NBD, on Tuesday launched a $13m charitable fund to disburse money to needy Muslims in the emirate.

The fund, which is part-financed by zakat contributions, will support low-income UAE residents with food and housing costs, and access to healthcare and education, deputy CEO Abdulla Showaiter told reporters during a press conference.

The fund will distribute $13m (AED50m) this year; of which around $9m comes from the bank’s 2015 zakat obligation, according to Emirates Islamic. The bank tops up the fund with around $400,000 each month.

Zakat, one of the pillars of Islam, is an obligatory form of alms giving which requires each Muslim to give 2.5 per cent of their net wealth to benefit the needy. A UN-backed report into humanitarian financing released in January estimated between $232bn and $560bn was given in zakat globally in 2015.

Some $8m of the fund has already been disbursed in 2016, including providing scholarships to students, debt relief for prisoners and cash transfers to families, said Awatif Al Harmoody, general manager, operational quality and processes at Emirates Islamic. For now the fund is limited to providing financial assistance to individuals, although it may support more long-term projects in future years, she added.

Both Emirati and expatriate Muslim individuals will benefit from the fund, with applications assessed by the bank’s fund committee or through a charity.

The bank also plans to set up an Islamic Banks Debt Relief Fund with other financial institutions in the UAE, to help those who cannot afford to pay back loans.