Najia Lotfi: "CoopHalal brings values of solidarity and social justice"

There is a financial entity that is trying to set itself up as an alternative to the current financial system. Through the principles that govern the social and solidarity economy, CoopHalal tries to respond to a series of demands that an important part of society has been making in terms of financing and investment. 

They themselves state that the raison d'être of this Cooperative Society is "to respond to a need of a group or community of Spanish society, which feels outside the existing financial system, or has very few dealings with the latter due to a lack of opportunities for Savings, Investment or Financing, in accordance with their beliefs and convictions". In addition to this, CoopHalal has the particularity of being a Cooperative governed by the principles of Islam, giving the option for followers of this religion to have financing plans in accordance with their religion, although they assure that this project is aimed at anyone, regardless of the religion they profess.

They state that the aim of the Cooperative is to "subscribe to, encourage, promote and put into practice the precepts and practices of the Islamic Economy and Finance/Social and Solidarity Economy in Spain", as well as bringing savers and entrepreneurs into contact with each other through a series of intermediation instruments that are fairer and more equitable. These new contracts, in addition to complying with current legislation in Spain, must have a certification that accredits that the principles of the Shari'a have been followed, which ensures compliance with the ethical values upheld by Islam.

For this reason, and due to the general lack of knowledge that exists in Spain regarding this type of project, we wanted to find out more about CoopHalal by contacting the director and president of CoopHalal, Najia Lotfi, who told us more about this type of financing, as well as its advantages. 
 

1.    How did the idea of CoopHalal come about? 

The idea comes from a long time ago. It started during my research period on Islamic economics. It really is an economy that deserves to be started. In European countries such as the United Kingdom and Germany, there are already cooperatives that implement these precepts. Before CoopHalal, an association called the Centre for Studies in Islamic Research and Economics was set up in 2013. We started with an association whose objective was to provide information, disseminate the precepts of an Islamic economy or the functioning of Islamic finance and institutions. After that association in 2015, people asked us where they could find this type of financing, as there was a significant demand, especially from the Muslim community here in Catalonia. 

It was then that I decided to surround myself with experts in Islamic finance and carry out this project, based on the principles of the socially responsible economy and applying the principles of the Shariah.

2.   On your website, you announce that CoopHalal responds to a need of a group of the society that serves outside the current financial system. What kind of service do you offer and what demand do you try to meet?

Most people who contact us find it difficult to find a Shariah-compliant investment opportunity for their savings. If they leave their savings to the bank this person does not know where these savings are invested...in which projects. Perhaps they are invested in alcohol, arms or tobacco financing projects. Maybe they go into schemes where a Muslim person does not feel comfortable. We offer a financial alternative that respects Islamic texts and where decisions are made jointly as all the members of the cooperative come together and decide whether to approve a project or not. We advocate projects that respect the real economy, i.e. that we can touch, such as job creation. For example, we have obtained two taxi licences and we have been able to hire people or obtain real estate through the projects we support. 

These are concrete projects in the real economy. Investment opportunities, plans, ways that are coherent with the beliefs of Muslims, although within this cooperative it is not necessary to be a Muslim as long as the principles are respected.

Another reason for contacting us is the issue of financing. In our religion, lending with interest is forbidden to an extreme, so we try to offer this type of financing to buy a house or set up a business. 

Our cooperative collects people's savings and invests them in interest-bearing loans, and the proceeds of this interest are distributed among the saving members. Within CoopHalal, formed in 2015, our objectives are to provide investment opportunities in Shariah-compliant projects, precepts of a socially responsible economy. We do not allow lending at interest. We invest in projects in the real economy, we do not speculate, we do not lend at interest. 

3.     So what are the principles that govern this type of banking?

They are those principles of the social and solidarity economy that are social justice. Such as not being able to evict the first time, the contract cannot have any clause that is ambiguous or that could lead to confusion between the parties, that is not an abusive clause. Contracts must be fair to both parties and there must be no small print that cannot be seen at first glance. 

Any sector that goes against the principles of the Shari'a or any sector that may harm human health or conscience or the environment is not financed. Islamic finance does not allow its financing or the setting up of businesses along these lines.

Likewise, do not deal with the interest rate. Any contact should have any amount or any price predetermined at the outset, it should be agreed from the beginning knowing exactly what you are going to pay whatever the time or circumstances. 

In addition to this, we try to encourage solidarity between people by contributing 2.5% of the profits to society, governed by the principle of solidarity within the Islamic banks. 
 

4.     How is this combination of the financial system and the Shariah achieved?

 The Shari'a is a set of laws that cover financial, economic, civil and commercial matters. There is a whole range of sacred texts that can be from the Koran or the prophet that govern financial or economic matters in general. 

For example, there is a Koranic text that clearly prohibits any interest-bearing loans. In order to implement it and prohibit any loan with interest, Islamic banks or Islamic financial experts have looked for other alternatives, among these, buying and selling. If I buy a flat and sell it to you at interest or market value, this profit I make is illegitimate. What we are trying to do is to help people who have been affected by the current financial system through religion. 
 

5.    This Cooperative could be a perfect example of interculturality...

Yes, interculturalism is necessary and goes far beyond peaceful coexistence. With this project, we are bringing the values of Islam and the texts of the Koran to Spanish society in the financial system. As I mentioned before, it is not necessary to be a Muslim to benefit from this. CoopHalal brings values related to solidarity and social justice, you don't need to be a Muslim to follow these values, even if we promote them from Islam. 

6.    What does CoopHalal expect from the future?

To continue to meet our objectives. We want this financial system to be implemented in Spain like the rest. There are many Muslims who do not feel comfortable with the current offers of financing or with the traditional functioning of banks, which forces them to take their savings outside Spain. It should be remembered that there are currently 2 million Muslims in Spain. The fact that they do not have financial offers that convince them hurts us all equally, so we want to serve society so that they can be confident that their savings can be safe in Spain.