Gov’t to Invest From Zakat Fund to Strengthen Islamic Finance System

The Maldivian government has announced plans to invest from the Zakat Fund and enhance its resources over the next two years, signalling a major step in developing the country’s Islamic finance system.

The move follows the recent passage of the nation’s first-ever Zakat law, which establishes a legal framework for managing and expanding the fund in line with Islamic Shariah principles.

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Minister of Islamic Affairs, Dr Mohamed Shaheem Ali Saeed, stated that although the law does not mandate direct investments from the Zakat Fund, it allows for such initiatives if deemed necessary.

The Minister emphasised the growing needs of Zakat recipients, which have exceeded the current availability of funds. The government intends to create a sustainable inflow of money into the fund through strategic investments, ensuring wider access to Zakat distributions.

The new Zakat law, effective from January, permits investments under the guidance of fiqh academies and fatwa councils. While not obligatory, these investments are intended to align with Islamic financial principles and meet increasing demand for Zakat assistance.

Over the past two years, Zakat contributions in the Maldives have reached record levels, with more than MVR 6.4 million deposited into the fund last year. The introduction of the Zakat Act forms part of wider efforts to strengthen the system, enhance transparency, and maintain public confidence in Zakat management.