(1). AL-HAYAT YESTERDAY, TODAY AND TOMORROW
Presented by Azeez Asif Olatubosun (Ph.D, MCIB)
President, Al-Hayat Relief Foundation, Nigeria.
During 2-Day Workshop for BOT, NEC Excos Committees and other stakeholders of  Al-Hayat,
Held  @ Al-Hayat House, Obalende, Ijebu-Ode.
Between 15th – 16th September, 2018

CONTENTS

  • Historical Background of Al-Hayat
  • Al-Hayat Achievements and Challenges in the first decade (Yesterday)
  • Al-Hayat Achievements and Challenges in the second decade (Today)
  • Vision for the next decade of Al-Hayat (Tomorrow)
  • Strategic plans to achieve the vision
  • Conclusion

EXECUTIVE SUMMARY

This paper aimed at refreshing our memory as regard the beginning of Al-Hayat Relief Foundation, taking you through stages of its growth/development, challenges and achievements, and finally propose what could be the future.

AL-HAYAT YESTERDAY Between 1997and 2007

  • Al-Hayat is 21 years old Islamic Co-operative Society.
  • Founded by six members and not up to 20 members at the end of its 1st Year.
  • During the first 10 years, Al-Hayat recorded 5 branches with 497 members and total assets of N12.9million.

CHALLENGES

  • Membership drive was low
  • Locally recognized (within Ijebu land)
  • Banking with interest based commercial banks with high COT
  • Long Queues at the banks
  • Little knowledge of fiqh Mu’amalat among members

ACHIEVEMENTS

  1. Yat water company was established
  2. First interest-free loan was N10,000 and later rose to the tune of N500,000 within the period.
  3. No waiting period for loan
  4. A room for office at 19, Olisa Street, Ijebu-Ode.
  5. Mr. Rafiu Wasiu Kehinde as first clerical officer.
  6. 3 bedroom flat as a corporate office/national Secretariat, at 18A, Olisa Street, Ijebu-Ode.
  7. Developing national structures.

AL-HAYAT TODAY Between 2007 and 2017

  • During this period, Al-Hayat received tremendous growth in all of its socio-economic activities and many achievements were recorded. However, a number of challenges faced the foundation, which required urgent solution.

ACHIEVEMENTS

  • Al-Hayat spread to 80 branches across Southwestern Nigeria including Kwara State.
  • Population rose to 16,000 members
  • Assets also rose to N1.5Billion
  • Loanable amount to an individual member rose to N1M in some branches
  • Al-Hayat Golden Estate was acquired and fairly developed.
  • Many branches also acquired landed properties
  • Al-Hayat Microfinance Bank was commissioned precisely  on the 20th March,      
  • Toyota Picnic car bus was purchased
  • Toyota Sienna car bus was also purchased
  • An ultra Modern Secretariat was acquired and commissioned on the 3rd, 2017. This is a prime success of the period.
  • National recognition through attending conferences, workshops and seminars

CHALLENGES

  • Fraudulent acts
  • Knowledge gap
  • Long waiting period for loan (qard)
  • Declining of trust
  • Three branches closed shop
  • Branch secession
  • Materialism/Misplaced priority
  • Death

The aforementioned challenges could lead to threat if they were not adequately managed.

AL-HAYAT TOMORROW OR VISION 2027

  • National and international recognition by having branches in all geo-political zones in the country, especially in the North.
  •  African leading interest-free microfinance institution by having branches in some African countries.
  • Metamorphose from one unit to national microfinance bank. That is to increase the share capital. Central Bank of Nigeria (CBN) allows foreign investors.
  • Standard business venture with good monthly returns.
  • A well-developed Golden Estate by providing electricity, water, road and other social amenities within the period.
  • Building of ultra-modern Mosque at Golden Estate through donation or endowment (waqf)
  • Sustainable socio-economic development without waiting period.
  • Sustainable socio-economic development without waiting period.
  • Pioneering Institute of Chartered Islamic Cooperators(ICIC). This is achievable with the assistance of IDB, Jeddah.
  • Adopting Al-Hayat Ta’wun model globally.

STRATEGIC PLANS

  • Train – The-Trainers workshops. Let us pick date for Chairmen, Vice Chairmen, Treasurers, Secretaries and Auditors.
  • Attending local and international conferences/ workshop/seminars for cross fertilization of ideas and global recognition.
  • Discipline – (There should be no sacred cow). Judgement should not be delayed.
  • Motivation – (Appreciating and showcasing outstanding performance)
  • Publicity – (Information Management Unit is required)
  • Commitment of all the stakeholders – (BOT, NEC, BEC & Committees)
  • Prayer – (Wala taqulana lishayin inni fa’ilun dhalika gadan, illa an yasha’a. Wadhkur rabbaka idha nasiita, waqul ‘asaa an yahdyani rabbi liaqraba min hādha rashadan (Q18:23-24)

May I suggest to adopt Headquarters branch approach to prayer, i.e. 15 minutes before the commencement of the meeting for special prayer for the success of the members and Al-Hayat Relief Foundation.

  • More vibrant branches
  • Standard reporting system –(Monthly returns from branches)
  • Internal control to protect Al-Hayat assets
  • Moderate life for the members – (through sermons and monthly lectures.           
  • Transparency –
  • Corporate governance – (Identify your role and act accordingly)
  • Shari’ah Compliance

CONCLUSION

Conclusively, Al-Hayat  was divinely established to alleviate poverty during our own time. Therefore, it should be adequately managed, well protected for future generations.

(2). PROPOSAL OF A NEW GROUP TAKAFUL SCHEME FOR AL-HAYAT RELIEF FOUNDATION

By Dr. Salako, Taofiki Ajani

(B. A. ED., M. ED. University of Lagos, Akoka, Yaba, Lagos).

(PhD. Islamic Science University of Malaysia, Nilai, Negeri Sembilan, Malaysia).

Specialization: Islamic Studies, Curriculum Studies, & Islamic Financial Studies

Outline

* Background History of Al-Hayat R. F.  (ARF) Group Life Takaful Scheme

* New Developments on Takaful

* International Standard for Group Life Takaful

* Proposal of New Takaful Scheme for Al-Hayat R. F. (ARF)

* Proposed Maturity Period for Al-Hayat R. F. Takaful Scheme

* Compensation for Beneficiaries

* Conclusion

Introduction

Takaful is a type of Islamic insurance, where members contribute money into a pool system in order to guarantee each other against loss or damage. Takaful-branded insurance is based on sharia, Islamic religious law, and explains how it is the responsibility of individuals to cooperate and protect each other. (google search) 

Wikipedia defines Takaful as “solidarity” or mutual guarantee or as a co-operative system of reimbursement or repayment in case of loss, organized as an Islamic or sharia compliant alternative to conventional insurance, which forbids riba (usury) and gharar (uncertainty).

Takaful is another term used in Islamic finance, which means Islamic insurance and is based on the principle of mutual assistance. In Takaful, members will contribute funds into a collective monetary pool for mutual protection and guarantee against any type of damage or loss. From the on set, It is to be noted that the concept of Takaful is not meant for profit generation but to compensate for the damage, loss or disaster that occurs to any participatory member.

Background History of Al-Hayat R. F. Group Life Takaful Scheme

Group Life Takaful as a scheme was introduced in to Al-Hayat Relief Foundation around 2004 about fifteen years ago, it became a NEC affair in the year 2009 when it was observed that it was difficult to gather money for the immediate burial of a member when death occurred. It was also introduced to serve as security for loans or businesses taken at Al-Hayat where a member died and needed to offset some balance. This was to assist our members to get pleasure in the grave and also to remove burden on survivors whom the deceased left behind.

However, recent happenings indicate that we have not been able to fulfill this at certain periods when some members die at the beginning of the commencement of another span of Takaful when a span of five years ends.

This is observed to have put some families in a disadvantage position, some members are even tempted to manipulate figures and information to make improper claims for their deceased members.

New Developments on Takaful

Presently, in Al-Hayat R. F., we use premium for the money paid by members under the Takaful scheme. Recent researches and unanimous opinions of scholars of Islamic Banking and Finance indicate that the proper Islamic term for such money paid by members should be tagged: Members’ Takaful Contributions. This term suits more the Islamic Takaful than the initial premium used.

Interactions with International Institute of Islamic Banking and Finance (IIIBF) Kano, Jaiz Bank PLC, Zero Interest Cooperative Society and other similar Islamic financial institutions reveal that Takaful Contributions when paid by members are not returned to members, members pay once any amount agreed upon and members take profits on the contributions rather than taking back their contributions.

This new information makes Group Takaful Programme to be very robust, steady, highly progressive and takes full care of every member who has contributed to the scheme. It will guide against denying members’ families losing out completely from getting compensations when their relations die at the commencement of another 5 year plan which has been the practice.

International Standard for Group Life Takaful

International standard practice of Takaful from Malaysia, Bahrain, United Arab Emirate and others confirm the practice of paying contributions into Takaful fund and not taking the back the money as we presently do at short span period as being the best practice so far in the operation and modules operandi of Group Life Takaful programme. (http://www.malaysiantakaful.com.my)

In the light of this, it is better that Al-Hayat R. F. adapts to this International Standard in the operation of its Takaful programme. This will make its Takaful scheme more Shariah compliant and more beneficial to every member of Al-Hayat in general whether old or new member.

Proposal of a New Group Takaful Scheme for Al-Hayat R. F.

The following proposal of Group Life Takaful Scheme is presented for adoption to replace the existence practice that has been in operation.

(i). Name of the Programme shall still be – Al-Hayat Relief Foundation Group Life Takaful Scheme.

(ii). Payments made by members will now be called- Group Life Takaful Contributions.

(iii). Every member of Al-Hayat Relief Foundation must participate in the scheme so that no member will be denied of its benefits and other associated gains. This will also serve as security and risk management for Al-Hayat as a foundation.  

(iv). Every member is to pay a contribution of #5,000 each. This could be paid once. For convenience, it is recommended that this be paid in ten installments, #500 per month within one year. This recommendation is shariah compliant with Group Life Takaful programme.

(v). It is recommended that the Group life Takaful scheme be made a whole lifetime affair. This shall prevent making any member lose benefit at the expiration of any fixed period be it 10, 20, 30 of 40 years, because some members would still fall victims. But making it a life span scheme will take care of every member no matters what happens.

(vi). It is also recommended that participatory contribution and reimbursement amount be reviewed every five years to take care of prevailing economic situations in the country and world at large.

(vii). Part of the members’ contributions will be invested in business, and profits will be paid yearly to every member on equal percentage. (Annual Takaful account is sarcosant)

(viii). Compensation will only be paid at death to member’s families.

(ix). Issue of termination at the end of every 5 year will be put to an end.

(x). Compensations will be used to offset any outstanding debt of the deceased member.

(xi). Any member expelled for debt or bad deed, his contribution will be used to service his or her debt. And if not on debt will be entitled only to his contribution of #5,000. This is shariah compliant principle for any participatory member who wants to withdraw from the scheme as against the laid down agreed policy at the commencement of the programme. 

(xii). Any deceased member’s account will be closed and compensation paid to his or her family. Any beneficiary’s families will not take profits.

Proposed Maturity Period for Al-Hayat Group Takaful Scheme

For Maturity Period – People choose any maturity date that is appropriate and suitable for their needs. The range is from 10 years to 40 years. (Malaysia Experience).

Considering the nature of Al-Hayat Relief Foundation and the investment where the Takaful fund is put into and considering the Nigerian environment which is not favourable to Islamic financing presently, the best and possible option is to a adopt whole lifetime duration. This will give a robust coverage, fair and just opportunities for all members of Al-Hayat R. F. at every stage of development.  

It is hope that Nigeria as country through the efforts of some groups like ARF and certain individuals will make more significant progress and development in the area of Islamic Finance i.e. putting all the needed structures and facilities in place which will work favourably with Islamic economics.

Compensation for Beneficiaries

Before now, a compensation of #60,000 was paid on behalf of a member who made #5,000 payment.

Contribution of #5,000 per member for lifetime is proposed.

If a member paid #5,000 x 16,000 members = # 80,000,000

#100,000 is hereby proposed for compensation at death to the families of deceased member. This is broken down as follow:

If compensation paid is #100,000 per member ÷ 16,000 members = #6.25 each   

In about 5 years 100 deaths x #100,000 = #10,000,000 ÷ 16,000 meb = #625 each

In about 10 years 250 deaths x #100,000 = #25,000,000 ÷ 16,000 meb = #1,562.5

In about 20 years 500 deaths x #100,000 = #50,000,000 ÷ 16,000 meb = #3,125

In about 30 years 700 deaths x #100,000 = #70,000,000  ÷ 16,000 meb = #4,375

In about  40 years 800 deaths x #100,000 = #80,000,000 ÷ 16,000 meb = #5,000

Conclusion

It is to be noted that the concept of Takaful in Islam is not aimed at generating profits or gains as pointed earlier but to assist one another in the period of calamity, losses and disaster.  This is the more reason why we need a pool of fund which can also be used to service this anytime the situation arises to any participatory member.

If we have this at the back of our mind, no one will refuse to make his or her contribution as at when due.

It seems that some people think that they are doing other people favour by contributing to the Group Takaful Scheme. We should all realize from today that we are not doing anybody any favour but that we are only preparing for a dooms day which will actually come whether we like it or not and whether we prepare for it or not.

May Allah enrich us in wisdom and make us abide by His guides and rules which are of enormous benefits to us as humanity. 

(3). NEED AND JUSTIFICATION FOR A NEW SOFTWARE FOR AL-HAYAT RELIEF FOUNDATION

By Dr. Salako, Taofiki Ajani

(B. A. ED., M. ED. University of Lagos, Akoka, Yaba, Lagos).

(PhD. Islamic Science University of Malaysia, Nilai, Negeri Sembilan, Malaysia).

Specialization: Islamic Studies, Curriculum Studies, & Islamic Financial Studies

Outline

* Introduction

* Justifications for the New Online Software

* Benefits from the use of the new software

* Challenges that may face the use of the new software

Introduction

Al-Hayat Relief Foundation has become big in terms of branches expansion and membership. More requests for establishment of branches keep coming in from near and far and presently requests are coming in from outside the country, this situation calls for a more robust online software which could be used to track transactions in various branches of the foundation.

The need for prompt view of the transactions, instant checking, quick reconciliations, daily monitoring of the activities and operations of the foundation at the NEC level and at other various branches level have become expedient for the foundation to address. The situation in Al-Hayat now goes beyond what could be done on part-time basis, it urgently requires a 24 hour attention and this among other things is what the software would guarantee.

More so, as the foundation branches grow bigger and membership increases, it is clear that more people are to be involved in carrying out some activities at the branches level. This would serve as succession strategy for the foundation for further future developments. This is to also determine certain activities to be carried out at the branch level and those activities to be carried out at the NEC level. This would afford members to get proper understanding of what they are doing and they would be able to explain whatever they have done.     

Justifications for the New Online Software

Recently, observations have been made as to challenges faced by the foundation at the close of accounts yearly. Among such are:

i). Short time in vetting and looking at the branches accounts.

ii). Inability of some branches to pass their accounts through for lack of one thing or the other.

iii). Inability of some branches to hold Annual General Meeting because of lack of completion of their accounts satisfactorily.

Iv). Lack of External Auditor’s inputs and attestation yearly.

v). Occasional conflicting figures supplied from the same source or sources.

vi). Probability and tendency to genuinely forget certain facts and pieces of information that are relevant to the foundation’s operations.

vii). Deliberate attempts to cover up facts, misinformation and manipulation of accounts etc.

Benefits from the use of the new software

The new software is an online software package which would involve the use of internet. Among the benefits to gain from the new software are:

1). It will give us the exact figures of all members, there will be no more estimates.

2). It will afford us the opportunity to access all branches and members accounts easily.

3). It will make it easy for us to monitor all branches activities at a goal.

4). It will assist us to checkmate illegal and unconstitutional practices.

5).  It will make it easy for us to view all the branches at a glance and put them on their toes.

6). It will assist us to monitor attendance in all branches.

7). It will assist us to checkmate branches’ secession on time and block out such secessionists.

8).  It will make it easy for us to check errors and mistakes and fix them before it is too late.

9). It will assist us to guide against loss of data and information.

10). It will make it easy for us to get quick recovery of information anytime there is need for it.

11). To remove monopoly in handling software packages.

12). It will make it easy for the branches to provide useful information on their dealings and entries.

13). It will assist us in monitoring amount remitted to NEC by branches.

14). Every chairman will be able to monitor his branches’ attendance, transactions etc wherever he may be or come from.

15). It will serve as succor for the chairmen particularly when chairmen now come from different locations to the branches they are assigned to.

16). It will assist NEC Business to get details of intending customers at their finger tips.

17). It will assist in checkmating giving out loans / business to non-members of the branch thereby helping in enforcing NEC policy.

18). It will help in reducing fraud and in exposing fraudulent activities before it is too late.

19).It will facilitate/encourage regular total/comprehensive auditing exercise of the foundation.     

Challenges that may face the use of the new software

There are certain challenges that may face the use of the new software, it is to be noted that no system can be totally perfect, but as we use it, we shall continue to observe these challenges and take care of them. Among such challenges are:

a). The new software will require the use of internet, this will have to be provided by the branches. However, it has been established that no branch can exhaust #1,000 data for the month. Data will be put on when the transactions are to be keyed online.

b). Some branches may claim that they do not have laptop or desktop computer, such branches should liaise with NEC for solution.

c). The other challenge will be how do we put in the previous record and when do we start to use the new software. There is need to inform us that NEC had decided earlier last year to start using it at the beginning of this financial year but the death of our immediate Past President put us off balance as you all would agree with me.

d). You could experience downtime or network failure while trying to key in the figures, let this not discourage us as we shall all find it fascinating at the end.

e). For the branches who already have clerks, teach your clerks to make them do the work, but you too should understand what they are doing to be able to monitor them. If they put in wrong information, you will be held responsible because you the Accounting Officer for the branch.

f). For branches who do not have clerks, get somebody from the branch who would be able to do it pending when you will be able to get one.