The UNDP is working with partners to create the largest partnership of its kind, the Global Takaful Alliance, according to a staement posted on the website of the UNDP Insurance & Risk Finance Facility.
UNDP’s vision to expand takaful through the Alliance has been joined by the Islamic Development Bank (IsDB), Arab Gulf Programme for Development (AGFUND), Kuwait Finance House (KFH) Group, and the Mohammed Bin Rashid Al Maktoum Global Initiatives (MBRGI).
A public-private initiative, the Alliance, with a planned launch at the COP16 of the United Nations Convention to Combat Desertification (UNCCD) in Riyadh in December this year, will leverage country, regional and global expertise and capacity on takaful at scale, with the ambition to build the financial resilience of 100 million people by 2030.
In the coming months, the Alliance and its members will prioritise further building engagement with governments, global and regional institutions, and financial and private sectors, looking to grow both the Alliance’s technical offer, on-the-ground practical operations, and financial strength.
The statement says that of the 30 countries most affected by the changing climate, over half are Muslim-majority populations. While the whole world is adjusting to rising risks driven largely by climate change, financial solutions for Muslim communities, must also comply with faith-based tenets. Providing financial solutions compliant with Islamic law is an additional challenge to building financial protection, adding to existing challenges such as lack of access, trust, and resources.
Insurance-type solutions that meet the needs of Muslim communities already exist in the form of takaful. To protect vulnerable people across the world from the escalating effects of climate change, policymakers and other public and private sector stakeholders must work together to better leverage this essential tool of takaful.
The concept for the Alliance was introduced last year as a direct response to the challenges of weak financial resilience in Muslim countries and communities on the frontline of growing risk.