Role of Islamic Finance during COVID-19

Abstract

Islamic Finance has always been well known for its unique characteristics to deal with finance. However, few countries pay heed on Islamic rules and regulations and fewer actually prefer to run based on it, the reason is obvious the oppositional standpoint with capitalism. Nevertheless, as the world is facing serious public health crisis like COVID-19, and all normal economic activities cease to function properly, conventional finance is facing serious challenges handling this situation. Though COVID-19 has already been called as great equalizer, not discriminating based on any social, economic, or political strata, Under-developing countries are having quite a hard time surviving this crisis, and Bangladesh is not an exception, especially the vulnerable community of Bangladesh. The objective of this study is to find out the practical implication of Zakat as short-term emergency support system for vulnerable community of Dhaka north City Corporation. To conduct the study, primary source of data was used, following a semi-structure questionnaire using quantitative method of data collection, and convenience sampling style was used for limited mobility induced by COVID-19 lockdown. The study finds out that the practical implications of Zakat are quite useful especially as a short term emergency support system during the COVID-19 crisis, this study also finds out that Zakat can be used as a tool for building resilience also only if smaller number of Zakat recipients are selected.