14 Ramadan: Training Leadership Mindsets

Takaful simply means joint guarantee whereby a group of individuals or parties agree to mutually guarantee each other against a certain loss.

Takaful is defined as a scheme based on brotherhood, solidarity and mutual assistance which provides for mutual financial aid and assistance to the participants, in case of need whereby, the participants mutually agree to contribute for that purpose.

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Hence, in practice, the participants agree to create a defined fund. Therefore, under the Takaful contract, the participants agree to relinquish a portion or the whole of the Takaful contribution as tabarru’ (to donate, to contribute, to give away) to the defined fund, thus enabling him to fulfil his obligation of mutual help and joint guarantee should any of his fellow participant suffers a defined loss.

The element of tabarru’ makes it no longer a contract of exchange but instead a contract of cooperation and mutual help where uncertainty is no more relevant. In line with the principle of cooperation, mutual help and joint responsibility, the concept of Takaful would therefore entail each person participating in the programme to agree giving away as donation certain portion or the whole amount of his contribution into the fund or the common pool. It is from this fund the financial assistance is paid in the event of a loss or damage inflicted by a defined catastrophe on any of the participants. As the defined fund belongs to all the participants, taking undue advantage among and between participants does not arise. Thus, there is no element of gambling or unjust enrichment under this arrangement.

Professionals of the industry may further discuss on Takaful VS conventional insurance, and other related knowledge, at an IBFIM’s programme, offered in a conducive and professional environment.

The Associate Qualification in Islamic Finance (AQIF) is designed specifically for meeting industry’s needs and standards. AQIF is developed to equip and assist working adults as well as industry practitioners in enhancing their competencies, skills and knowledge in Islamic finance.

Upon completion, participants will be able to:

  • Acquire basic knowledge of Shariah, the requirements of Mualamat contracts and the differences between Islamic and Conventional Finance;
  • Apply various Shariah contracts commonly applied in mainstream Islamic finance products and services;
  • Understand the fundamental knowledge of ethics from Islamic perspective and its relation to Islamic finance;
  • Understand the principles of Islamic law and other regulatory framework that govern the Islamic Financial system; and
  • Identify the basic components in contemporary Islamic Architecture.

Successful candidates will be awarded the AQIF certification.

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