Artificial Intelligence (AI) through the Lens of Islamic Economics – V

We can take comfort with the forecast that AI will firmly stay within human control and conveniently, trash the forecast of some that machines will become incomprehensibly smarter than humans with artificial super intelligence (ASI). However, in the event ASI materializes, it will be beyond our control. We can only hope that, before the inevitable…

Artificial Intelligence (AI) through the Lens of Islamic Economics – IV

Text analysis may be useful, for instance, for a waqf organization to know what the neighborhood feels about the public goods (education, healthcare, orphan care etc.) it provides. An association of zakat organizations in a country concerned about a high rate of “donor attrition” may feel the need for a “feel-good analysis” of donors. A…

Artificial Intelligence (AI) through the Lens of Islamic Economics – III

When a poor and needy individual (faqir/ miskeen) is wrongly classified as non-poor and deprived of zakat (a case of false-negative) or a rich is wrongly classified as poor and receives zakat (a case of false-positive), it involves ethical dilemmas of varying order. Of course, there are in-built mechanisms within the classification models to address…

Artificial Intelligence (AI) through the Lens of Islamic Economics – I

Intelligence, intellect, rationality may be subsumed under the notion of Aql in Islamic economics. However, when intelligence is artificial, it raises new issues and challenges. This is the first in a series of blogs that touches upon this issue and sets the stage for further discussion on application of AI in Islamic finance. Let me…

Blockchains through the Lens of Islamic Economics

Verifiability, traceability, immutability, validation through consensus, sharing through network, inter-generational distribution - attributes and concepts common to block chain methodology have a root in Islamic scholarship. The “chain” played a significant role in shaping the contours of Islamic economics, by creating the authenticated and tamper-proof records of the words of God and the words and…

The Issue of Anonymity in Digital Zakat

Identity brings in many benefits in the context of zakat distribution (as underlined in my earlier blog). Lack of identity or anonymity on the part of the beneficiaries is certainly not desirable. It should be obvious that a digital environment makes it possible for the zakat organization to collect many types of personal data. Zakat…

The Issue of Identity in Digital Distribution of Zakat

My last blog ended on a note that digitizing zakat payments to beneficiaries would be more efficient, as compared to payments involving hard cash or in-kind payments, by avoiding costs related to leakages, fraud and ensuring greater accountability. This comes with a few qualifiers, however. We assume that the technology and infrastructure is there. And…

Making Sense of Digital Distribution of Zakat

Zakat may be paid out by an individual muzakki (zakat payer) directly to an individual mustahiq (zakat beneficiary). This is the practice in countries where there is no organized or institutional mobilization and disbursement of zakat. Arguably, organized zakat management has many positives. Available evidence suggests that organized zakat management may be more efficient in…

Enhancing Islamicity with Fintech: Case of the Investment Account Platform (IAP) – II

The Investment Account Platform (IAP) is an internet-based multibank platform. It provides for an engine for efficient mobilization of funds. It offers new risk-reward concepts that is expected to benefit investors and entrepreneurs. So far, IAP has 7 partner banks, and has raised over USD 50 million from 300 plus investors for 13 projects. The…

Enhancing Islamicity with Fintech: Case of the Investment Account Platform (IAP) – I

The purpose of an Islamic financial system is to mobilize funds from savings-surplus units and allocate the same among savings-deficit units in the economy and to do this in accordance with the goals of the Shariah. Taking the Malaysian example, one may observe that the contracts/products involved in the process have changed over time. From…